Instead of increasing its long-term debt by borrowing money to purchase new stereo equipment, Jay's Jams Inc.decides to lease the equipment.How does this affect its long-term debt ratio?
A)It will decrease
B)It will increase
C)It will remain unchanged
D)Unknown without the amount of the lease obligation

Question

Quizplus · Accepted Answer

Leasing does not affect long-term debt ratio.

Instead of Increasing Its Long-Term Debt by Borrowing Money to Purchase