Problem $9-4$A $($Algo$)$ Explore the impact of leases on the debt to equity ratio $($LO$9-3,9-8)$

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Thrillville has $$39\mathrm{.}8$ million in bonds payable. One of the contractual agreements in the bond is that the debt to equity ratio cannot exceed $2\mathrm{.}0.$ Thrillville$$s total assets are $$79\mathrm{.}8$ million, and its liabilities other than the bonds payable are $$9\mathrm{.}8$ million. The company is considering some additional financing through leasing.

Problem $9-4$A $($Algo$)$ Part $4$

The company enters a lease agreement requiring lease payments with a present value of $$14\mathrm{.}8$ million.

$4-$a$.$ Will entering into the lease cause the debt to equity ratio to be in violation of the contractual agreement in the bond?

$4-$b$.$ Determine your answer by calculating the debt to equity ratio after recording the lease.