Pamela Darden owed Clark $5,000 on an unsecured loan. On May 1, Pamela approached Clark for an additional loan of $3,000. Clark agreed to make the loan only if Pamela could obtain a surety. On May 5, Simpson agreed to be a surety on the $3,000 loan, which was granted that day. Both loans were due on October 1. On June 15, Pamela sent $1,000 to Clark but did not provide any instructions. a. What are Clark’s rights? b. What are Simpson’s rights?
Pamela Darden owed Clark $5,000 on an unsecured loan. On May 1, Pamela approached Clark for an additional loan of $3,000. Clark agreed to make the loan only if Pamela could obtain a surety. On May 5, Simpson agreed to be a surety on the $3,000 loan, which was granted that day. Both loans were due on October 1. On June 15, Pamela sent $1,000 to Clark but did not provide any instructions. a. What are Clark’s rights? b. What are Simpson’s rights?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Pamela Darden owed Clark $5,000 on an unsecured loan. On May 1, Pamela approached Clark for an additional loan of $3,000. Clark agreed to make the loan only if Pamela could obtain a surety. On May 5, Simpson agreed to be a surety on the $3,000 loan, which was granted that day. Both loans were due on October 1. On June 15, Pamela sent $1,000 to Clark but did not provide any instructions.
a. What are Clark’s rights?
b. What are Simpson’s rights?
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