A Bailment Was Created Between Owen and Padma

question 7

Multiple Choice

A bailment was created between Owen and Padma. The bailment involved the storage of a widget for 12 months. The price for storage was $1000 per month. At the end of the year, only $5000 had been paid in total. The widget was worth $10 000. It was sold for that amount under a lien and right of sale. Ignoring the costs associated with the enforcement of the lien and the right of sale, when the sale proceeds are distributed, the bailor will be entitled to receive

• A) $7000.
• B) $12 000.
• C) $10 000.
• D) $1000.
• E) $3000.

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Definitions:

Conversion

The process of changing assets from one form to another, such as the conversion of raw materials into finished goods.

Mortgage Note Payable

A long-term liability listed on a company's balance sheet representing the borrower's obligation to repay a secured loan, typically used for real estate purchases.

Construction

The process of building, assembling, or forming infrastructure, buildings, or other constructed assets.

Installment Payments

Payments made regularly over a period of time to settle a debt or purchase, often including interest charges.