CJ and Danny have incorporated and obtained a $100,000 loan in their corporate name. The loan is payable with interest over five years. After paying on the loan regularly for two years, the business falters due to the economy, and CJ and Danny default on the loan. Their business has no assets. Which of the following statements best describes CJ and Danny's liability in this case? Group of answer choices CJ and Danny are each individually liable for one-third of the debt, with the corporation liable for the remaining third. CJ and Danny are each individually liable for one quarter of the debt, with the corporation liable for the remaining half. CJ and Danny are jointly and severally liable for the entire balance. CJ and Danny have no personal liability for the debt unless they pledged personal assets as collateral or signed a personal guarantee.
CJ and Danny have incorporated and obtained a $100,000 loan in their corporate name. The loan is payable with interest over five years. After paying on the loan regularly for two years, the business falters due to the economy, and CJ and Danny default on the loan. Their business has no assets. Which of the following statements best describes CJ and Danny's liability in this case? Group of answer choices CJ and Danny are each individually liable for one-third of the debt, with the corporation liable for the remaining third. CJ and Danny are each individually liable for one quarter of the debt, with the corporation liable for the remaining half. CJ and Danny are jointly and severally liable for the entire balance. CJ and Danny have no personal liability for the debt unless they pledged personal assets as collateral or signed a personal guarantee.
Chapter7: Deductions And Losses: Certain Business Expenses And Losses
Section: Chapter Questions
Problem 29P
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Question
CJ and Danny have incorporated and obtained a $100,000 loan in their corporate name. The loan is payable with interest over five years. After paying on the loan regularly for two years, the business falters due to the economy, and CJ and Danny default on the loan. Their business has no assets. Which of the following statements best describes CJ and Danny's liability in this case?
Group of answer choices
CJ and Danny are each individually liable for one-third of the debt, with the corporation liable for the remaining third.
CJ and Danny are each individually liable for one quarter of the debt, with the corporation liable for the remaining half.
CJ and Danny are jointly and severally liable for the entire balance.
CJ and Danny have no personal liability for the debt unless they pledged personal assets as collateral or signed a personal guarantee.
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ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT