Problem 9-4A (Algo) Explore the impact of leases on the debt to equity ratio (LO9-3, 9- 8) [The following information applies to the questions displayed below.) Thrillville has $40.9 million in bonds payable. One of the contractual agreements in the bond is that the debt to equity ratio cannot exceed 2.0. Thrillville's total assets are $80.9 million, and its liabilities other than the bonds payable are $10.9 million. The company is considering some additional financing through leasing. Problem 9-4A (Algo) Part 4 The company enters a lease agreement requiring lease payments with a present value of $15.9 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. The company enters a lease agreement requiring lease payments with a present value of $15.9 million. Will entering into the le the debt to equity ratio to be in violation of the contractual agreement in the bond? Will entering into the lease cause the debt to equity ratio to be in violation of the contractual agreement in the bond? The company enters a lease agreement requiring lease payments with a present value of $15.9 million. Determine your answer by calculating the debt to equity ratio after recording the lease. (Enter your answers in millions (i.e., $5,500,000 should be entered as 5.5) rounded to 1 decimal place. Round ratio answer to 2 decimal places.) Debt to Equity Ratio Numerator/Denominator Amounts Required information Problem 9-5A (Algo) Record bond issue and related interest (LO9-5) [The following information applies to the questions displayed below.] On January 1, 2024, Twister Enterprises, a manufacturer of a variety of transportable spin rides, issues $410,000 of 6% bonds, due in 15 years, with interest payable semiannually on June 30 and December 31 each year. Problem 9-5A (Algo) Part 1 Required: 1. If the market interest rate is 5%, the bonds will issue at $410,000. Record the bond issue on January 1, 2024, and the first two semiannual interest payments on June 30, 2024, and December 31, 2024. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.) 1 Record the bond issue. 2 Record the first semiannual interest payment. 3 Record the second semiannual interest payment.

Problem 9-4A (Algo) Explore the impact of leases on the debt to equity ratio (LO9-3, 9- 8) [The following information applies to the questions displayed below.) Thrillville has $40.9 million in bonds payable. One of the contractual agreements in the bond is that the debt to equity ratio cannot exceed 2.0. Thrillville's total assets are $80.9 million, and its liabilities other than the bonds payable are $10.9 million. The company is considering some additional financing through leasing. Problem 9-4A (Algo) Part 4 The company enters a lease agreement requiring lease payments with a present value of $15.9 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. The company enters a lease agreement requiring lease payments with a present value of $15.9 million. Will entering into the le the debt to equity ratio to be in violation of the contractual agreement in the bond? Will entering into the lease cause the debt to equity ratio to be in violation of the contractual agreement in the bond? The company enters a lease agreement requiring lease payments with a present value of $15.9 million. Determine your answer by calculating the debt to equity ratio after recording the lease. (Enter your answers in millions (i.e., $5,500,000 should be entered as 5.5) rounded to 1 decimal place. Round ratio answer to 2 decimal places.) Debt to Equity Ratio Numerator/Denominator Amounts Required information Problem 9-5A (Algo) Record bond issue and related interest (LO9-5) [The following information applies to the questions displayed below.] On January 1, 2024, Twister Enterprises, a manufacturer of a variety of transportable spin rides, issues $410,000 of 6% bonds, due in 15 years, with interest payable semiannually on June 30 and December 31 each year. Problem 9-5A (Algo) Part 1 Required: 1. If the market interest rate is 5%, the bonds will issue at $410,000. Record the bond issue on January 1, 2024, and the first two semiannual interest payments on June 30, 2024, and December 31, 2024. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.) 1 Record the bond issue. 2 Record the first semiannual interest payment. 3 Record the second semiannual interest payment.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter24: Enterprise Risk Management

Section: Chapter Questions

Problem 4P

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