Question: The bond indenture for the 10 year 9 debenture bonds issued

The bond indenture for the 10-year, 9% debenture bonds issued January 2, 2013, required working capital of $100,000, a current ratio of 1.5, and a quick ratio of 1.0 at the end of each calendar year until the bonds mature. At December 31, 2014, the three measures were computed as follows:

a. List the errors in the determination of the three measures of current position analysis.
b. Is the company satisfying the terms of the bondindenture?

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  • CreatedFebruary 28, 2014
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