A description of several financial instruments follows:

Case A Subordinated 8% debentures payable, interest payable semi-annually, due in the year 20X8. At maturity, the face value of the debentures may be converted, at the companys option, into common shares at the market price at that time. Interest may also be paid in shares using the market value of shares at the interest payment date.

Case B Series B shares, nonvoting, annual $1.25 cumulative dividend, convertible at the investors option into 10 common shares in 20X6.

Case Subordinated 4% debentures payable, interest payable in cash semi-annually, due in 20X9. At maturity, the face value of the debentures must be converted into common shares at a price of $22 per share.

Case Series C shares, nonvoting, annual $1.25 noncumulative dividend, redeemable at the investors option for $29 per share at any time.

Case Subordinated bonds payable, bearing an interest rate of 5%, interest reset every five years with reference to market rates; principal due to be repaid only on the dissolution of the company, if ever, although may be repaid at the companys option on interest repricing dates.Case F Series B preferred shares, annual $6 cumulative dividend, convertible into four common shares for every $100 preferred share at the investors option, redeemable at $32 per share at the companys option in 20X10.

1. Classify each financial instrument as debt, equity, or compound (part debt and part equity). Explain your reasoning.