Response to the following questions:
1. Why is it important to compare long-term debt ratios of a given firm with industry averages?
2. How should lessees account for operating leases? Capital leases? Include both income statement and balance sheet accounts.
3. A firm with substantial leased assets that have not been capitalized may be overstating its long-term debtpaying ability. Explain.
If possible, please give examples to better understand your answers.