Tremont Inc.'s Total Assets =$25 million. The balance sheet shows Accounts payable and accruals totaling $7 million, common stock and retained earnings total $10 million. There is no preferred stock. What is the book value of interest bearing debt?

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The book value of interest-bearing debt can be calculated by subtracting the total equity and non-interest-bearing liabilities (accounts payable and accruals) from total assets. Total assets = $25 million, accounts payable and accruals = $7 million, and common stock and retained earnings (total equity) = $10 million. Thus, interest-bearing debt = $25 million - $7 million - $10 million = $8 million.