What are the implications of stronger bond covenants?
What will be an ideal response?
Answer: While equity holders may prefer as few covenants as possible, stronger bond covenants have their advantage. Stronger covenants will imply lower interest rates due to a smaller likelihood of default.
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Cardinality is the number of instances of entity B that can (or must) be associated with each instance of entity A
Indicate whether the statement is true or false
On January 1 . Blalock Company as lessee signed a ten-year noncancelable lease for a machine with annual payments of $60,000 . The first payment was also made on January 1 . Blalock appropriately treated this transaction as a capital lease. The ten lease payments have a present value of $405,000 at January 1 . based on implicit interest of 1 . percent. For the first year, Blalock should record
interest expense of a. $0. b. $6,000. c. $34,500. d. $40,500.