How to use coffeescript with Sinatra

I'm trying to get coffeescript working with Sinatra. I'm new to both technologies so this is probably something silly. My problem seems to be that the coffeescript compiles to javascript but doesn't execute on page, instead appearing as html.

#sinatra app
require 'coffee-script'
get "/test.js" do
  coffee :hello
end

#hello.coffee
alert "hello world"

#My page (/test.js) doesn't execute the js - just displays the code

#On screen in the browser I get this:
   (function() {
  alert("hello world");
}).call(this);

#In the HTML I get this within the body tags

<pre style="word-wrap: break-word; white-space: pre-wrap;">(function() {
  alert('hello world!');
}).call(this);
</pre>