These financial statement items are for Barone Corporation at year-end, July 31, 2010.

• Salaries Payable 2,080
• Salaries Expense 51,700
• Utilities expense 22,600
• Equipment 18,500
• Accounts Payable 4,000
• Commission revenue 66,100
• Rent revenue 8,500
• Long-term note payable 1,800
• Common Stock 16,000
• Cash 29,200
• Accounts Receivable 9,780
• Accumulated depreciation 6,000
• Dividends 4,000
• Depreciation expense 4,000
• Retained earnings 35,200

Suppose that you are the president of Allied Equipment. Your sales manager has approached you with a proposal to sell $20,000 of equipment to Barone. He would like to provide a loan to Barone in the form of 10%, 5-year note payable. Evaluate how this loan would change Barrone's current ratio and debt to total assets ratio and discuss whether you would make the sale.