what-is-the-effect-on-the-accounting-equation-when-8000-of-long-term-debt-is-rec

Question

What is the effect on the accounting equation when $8,000 of long-term debt is reclassified as current liabilities?

Accepted Answer

Total liabilities remain the same, but current liabilities increase and long-term liabilities decrease.

Answer

Equity decreases by $8,000.

Answer

Total liabilities increase by $8,000.

Answer

Assets decrease by $8,000.

What is the effect on the accounting equation when \$8,000 of long-term debt is reclassified as current liabilities?