Pete Borrows $5,000 from Willy in a Secured Transaction Using

question 70

Multiple Choice

Pete borrows $5,000 from Willy in a secured transaction using Pete's BMW as collateral.Pete then borrows $7,000 from Janet using the same car as collateral.Neither Willy nor Janet perfects their security interests.Pete defaults on the loans.The party with priority is

• A)Willy,because his interest was the first to attach.
• B)Janet,because Pete owes her more money.
• C)Janet,because her interest was the second to attach.
• D)Willy,because Pete owes him less money.

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Definitions:

Common Stock

Equity securities representing ownership in a corporation, giving holders voting rights and a share in the company’s profits through dividends.

Trial Balance

An accounting report that lists the balances of all ledgers accounts to check the mathematical accuracy of the bookkeeping system.

Debit Balance

Refers to the excess of debits over credits in an account, indicating either an increase in assets or expenses or a decrease in liabilities, equity, or income.

Debits

Entries that are made on the left side of an account, representing an increase in assets or expense accounts or a decrease in liability, equity, or revenue accounts.