On 1 January 2009, a company that prepares its financial statements according to IFRS issued bonds with the following features:

An analyst makes the appropriate adjustments to the financial statements of retail companies that are lessees using a substantial number of operating leases.Compared to ratios computed from the unadjusted statements, the ones computed from the adjusted statements wouldmost likely be higher for:

A.the debt-equity ratio but not the interest coverage ratio.

B.the interest coverage ratio but not the debt-equity ratio.

C.both the debt-equity ratio and the interest coverage ratio.

A company issued $2,000,000 of bonds with a 20 year maturity at 96.Seven years later, the company called the bonds at 103 when the unamortized discount was $39,000.The company would most likely report a loss of:

A.$60,000.

B.$99,000.

C.$138,000.

A company, which prepares its financial statements in accordance with IFRS issues ￡5,000,000 face value ten year bonds on January 1, 2010 when interest rates are 5.50%.The bonds carry a coupon of 6.50%, with interest paid annually on December 31.The carrying value of the bonds as of December 31, 2011 will be closest to:

A.￡4,695,562.

B.￡5,301,000.

C.￡5,316,000.

Compared to classifying a lease as a financing lease, if a lessee reports the lease as an operating lease it will most likely result in a:

A.lower return on assets.

B.higher debt-to-equity ratio.

C.lower cash from operations.