Josie Cohen Borrowed Money from Second Bank and Trust to Buy

question 16

Essay

Josie Cohen borrowed money from Second Bank and Trust to buy her home. She gave Second Bank a mortgage on the home. Josie loses her job and is unable to make the payments on the mortgage. Second Bank gives Josie notice that the delinquent payments must be paid by July 1 or the bank will foreclose on the mortgage. Josie does not make the payments and Second Bank starts foreclosure proceedings. Josie obtains a loan from her aunt in an amount sufficient to pay off entirely the debt owed to Second Bank. Josie tenders the full amount to Second Bank, but Second Bank refuses to accept the money. Second Bank says that Josie was too late to stop the foreclosure. Can Josie require Second Bank to accept payment of its loan in full?

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Definitions:

Periodic System

A method of inventory tracking where updates are made on a periodic basis rather than continuously, typically at the end of an accounting period.

Cost of Goods Sold

Direct expenses involved in producing the goods that a company sells, including costs of materials and labor.

LIFO

"Last In, First Out," an inventory valuation method where the most recently produced or acquired items are sold first.

Perpetual Inventory System

An inventory system that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management software.