Greg Told Rick That He Would Be Willing to Pay

question 18

Multiple Choice

Greg told Rick that he would be willing to pay a high rate of interest for a two-month loan of $2000. Rick agreed to lend Greg this amount at an annual rate of 20%, repayable March 1, 2016. Greg agreed to these terms. Greg did not pay on March 1. Rick learned that Greg had recently completed some work for Martinson for which Greg was owed $2000. Now that Greg is in default, which of the following is False?

• A) Rick could sue Greg for breach of contract.
• B) Rick could execute against Greg even if Rick had not obtained judgment against him.
• C) Rick could not place Greg into bankruptcy unless Greg had committed an act of bankruptcy.
• D) If Rick obtained a judgment against Greg, he could compel him to be examined about his income, property, and debts.
• E) Once he has obtained judgment, Rick can garnishee the money owed to Greg by Martinson.

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Definitions:

Consolidated Income Statement

A financial statement that summarizes the revenue, expenses, and profits of a parent company and its subsidiaries.

Bonds Payable

A long-term debt instrument issued by a company or government agency, promising to pay its holder a specified sum of money at a future date plus periodic interest payments.

Open Market

A system where goods and services are traded freely between participants, often characterized by a lack of restrictions or tariffs.

Consolidated Income Statement

A financial statement that combines and presents the total income and expenses of a parent company and its subsidiaries, showing the net profit or loss of the entire group.