Question
ABC Corporations balance sheet shows assets of $10,000,000, liabilities of $5,500,000, and equity of $4,500,000. ABC enters into a capital lease for certain equipment. On
ABC Corporations balance sheet shows assets of $10,000,000, liabilities of $5,500,000, and equity of $4,500,000. ABC enters into a capital lease for certain equipment. On the date of signing, the present value of the lease payments is $700,000. Calculate the initial effect of this lease on ABCs debt ratio.
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Advanced Financial Accounting
Authors: Richard Baker, Theodore Christensen, David Cottrell
9th edition
78110920, 978-0077899165, 77899164, 978-0077484255, 77484258, 978-0078110924
