Financial statements affected by 50/50 debt and equity payments?
Apologies if this question has been asked before on the board, but I haven't been able to find an answer to it. If a company is to buy a tractor and pay for it with 50% debt and 50% equity, how would that affect the financial statements in year 1 (before interest and depreciation), in year 2, and at the end of year 3 when you sell the item?
This is for the purposes of an interview question. As far as I've figured, you would have to ask specifics like what the interest rate is, kind of depreciation/what depreciation rate, if the tractor was sold at its depreciated value or less/more, etc., but I can't get past that. Any help with how to walk through a question like this step-by-step? Thanks in advance.
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