Which of the following is considered long-term debt?

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Multiple Choice

Which of the following is considered long-term debt?

Long-term debt means borrowing that isn’tdue to be repaid within one year and typically has a defined end date beyond that horizon. A bond issue with a three-year maturity clearly fits this, since the principal is due at the end of three years and it usually comes with fixed interest payments over that period. The other options are short-term because they mature in less than a year—a 90-day Treasury bill and a note payable due in six months. A line of credit with no fixed term doesn’t have a set maturity date, so it isn’t considered long-term debt; it’s revolving financing that can be drawn and renewed as needed, rather than a fixed-term obligation.

Long-term debt means borrowing that isn’tdue to be repaid within one year and typically has a defined end date beyond that horizon. A bond issue with a three-year maturity clearly fits this, since the principal is due at the end of three years and it usually comes with fixed interest payments over that period. The other options are short-term because they mature in less than a year—a 90-day Treasury bill and a note payable due in six months. A line of credit with no fixed term doesn’t have a set maturity date, so it isn’t considered long-term debt; it’s revolving financing that can be drawn and renewed as needed, rather than a fixed-term obligation.

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