Question

Which items would be classified as long-term debt?

a. Mortgages, convertible debentures, bonds payable.
b. Common stock, retained earnings, bonds payable.
c. Deferred taxes, accrued expenses, treasury stock.
d. Accounts payable, unearned revenue, pension liabilities.

Answer 1

The items classified as long-term debt are mortgages, convertible debentures, and bonds payable. These financial instruments are used for borrowing funds with repayment terms extending beyond one year.

Step-by-step explanation:

Items that would be classified as long-term debt include mortgages, convertible debentures, and bonds payable. These are all forms of borrowing that are meant to be repaid over a period longer than one year.

Mortgages are typically long-term loans taken to purchase property and are secured by the property itself. Convertible debentures are a type of long-term debt that can be converted into equity or stock at the discretion of the holder. Bonds payable represent long-term borrowing where the issuer is obliged to pay interest and return principal at a later date, typically more than one year in the future.

Common stock and retained earnings are equity, not debt. Deferred taxes, accrued expenses, and treasury stock are current liabilities or equity items, not long-term debt. Accounts payable and unearned revenue are considered short-term liabilities, whereas pension liabilities can be considered long-term since they are due more than a year later.