Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. on february 1, 2019, borrower borrows $5,000 from

On February 1, 2019, Borrower borrows $5,000 from Bank 1 pursuant to a note that...

80.2K

Verified Solution

Question

Accounting

On February 1, 2019, Borrower borrows $5,000 from Bank 1 pursuant to a note that is repayable on July 1, 2019, and grants Bank 1 a security interest in its store equipment. A security agreement is executed. However, due to a mistake at Bank 1, a financing statement is not filed until April 1, 2019.

On March 1, 2019, Borrower borrows $5,000 from Bank 2, also pursuant to a note that is repayable on July 1, 2019, and grants Bank 2 a security interest in the same collateral, its store equipment. A security agreement is executed and a financing statement is filed on March 2, 2019.

When Borrower defaults on both loans, which Bank has priority and why?

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students