Answer the following question:

Sandy Corp. has one debt covenant in place, a times-interest-earned ratio, calculated as income before interest and taxes divided by total interest expense. Which of the following accounting policies would the company want to adopt? Explain.

a) Expense $52,000 of development costs immediately instead of capitalizing

b) Switch from a straight-line to a double declining balance method of depreciation

c) Issue a $500,000, 4%, 10-year bond payable rather than issue preferred shares

d) Record $14,000 of warranty expense when warranty services are provided