A company desires to replace its current plant equipment with new equipment that costs $10000000. One possibility would be for the company to issue $10000000 of bonds and use the proceeds to purchase the equipment. Another possibility is to acquire the use of the equipment by signing a long-term capital lease with a leasing company. Describe and compare the financial statement effects of these two alternatives.

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The Answer of A company desires to replace its current plant equipment with new equipment that costs $10000000. One possibility would be for the company to issue $10000000 of bonds and use the proceeds to purchase the equipment. Another possibility is to acquire the use of the equipment by signing a long-term capital lease with a leasing company. Describe and compare the financial statement effects of these two alternatives.

A Company Desires to Replace Its Current Plant Equipment with New