D is indebted to C for P10,000 due on March 31, 2022. To secure the fulfillment thereof, D endorsed a negotiable promissory note executed by P for P15,000 due on January 31, 2022. In this case, a. The pledge is void since the promissory note would be due earlier than the obligation it secures. b. D will collect the P15,000 on January 31, 2022 and pay C with the proceeds of the collection c. C may collect the proceeds of the note and apply the P15,000 for the payment of D’s obligation d. C may collect the proceeds of the note and applyP10,000 for the payment of D’s obligation and return the excess P5,000 to D.
D is indebted to C for P10,000 due on March 31, 2022. To secure the fulfillment thereof, D endorsed a negotiable promissory note executed by P for P15,000 due on January 31, 2022. In this case, a. The pledge is void since the promissory note would be due earlier than the obligation it secures. b. D will collect the P15,000 on January 31, 2022 and pay C with the proceeds of the collection c. C may collect the proceeds of the note and apply the P15,000 for the payment of D’s obligation d. C may collect the proceeds of the note and applyP10,000 for the payment of D’s obligation and return the excess P5,000 to D.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
D is indebted to C for P10,000 due on March 31, 2022. To secure the fulfillment thereof, D endorsed a negotiable promissory note executed by P for P15,000 due on January 31, 2022. In this case,
a. The pledge is void since the promissory note would be due earlier than the obligation it secures.
b. D will collect the P15,000 on January 31, 2022 and pay C with the proceeds of the collection
c. C may collect the proceeds of the note and apply the P15,000 for the payment of D’s obligation
d. C may collect the proceeds of the note and applyP10,000 for the payment of D’s obligation and return the excess P5,000 to D.
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