Thrillville has $40.2 million in bonds payable. One of the contractual agreements in the bond is that the debt to equity ratio cannot exceed 2.0. Thrillvilles total assets are $80.2 million, and its liabilities other than the bonds payable are $10.2 million. The company is considering some additional financing through leasing. The company enters a lease agreement requiring lease payments with a present value of $15.2 million.

4-a. Will entering into the lease cause the debt to equity ratio to be in violation of the contractual agreement in the bond?

4-b. Determine your answer by calculating the debt to equity ratio after recording the lease.