R&R management signed a 20 years financing lease agreement on Jan 1, 2015. The present value of the lease agreement is $ 85,136. Annual lease payment $10,000 is due on Dec 31 every year. The first lease payment is due on Dec 31, 2015. The interest rate is 10%. How much would be the current portion of the lease liability on Dec 31, 2015s statement of financial position?

Question 1 options:

a)

8,365

b)

8,514

c)

1,635

d)

1,486

Which of the following solvency positions would a company consider most favourable?

Debt to total assets=total debt/total assets Times interest earned=EBIT/Interest

Question 2 options:

a)	a low debt to total assets ratio and a low times interest earned ratio

b)	a high debt to total assets ratio and a high times interest earned ratio

c)	a high debt to total assets ratio and a low times interest earned ratio

d)	a low debt to total assets ratio and a high times interest earned ratio