A Company Issues $200,000 in Long-Term Bonds and Buys $200,000

Multiple Choice

A company issues $200,000 in long-term bonds and buys $200,000 in inventory for cash. Which of the following statements is true?

A) The quick ratio will stay the same and the times interest earned ratio will fall.
B) The quick ratio will rise and the times interest earned ratio will rise.
C) The quick ratio will rise but the times interest earned ratio will fall.
D) The quick ratio will rise and the times interest earned ratio will stay the same.