Asked by
Katherine Pepler
on Nov 21, 2024
Verified
In what order should the partnership's debts be paid?
A) The bank loan, then the loan to Ava, then the capital to the partners.
B) The bank loan, then the capital to the partners, then the loan to Ava.
C) The loan to Ava, then the bank loan, then the capital to the partners.
D) The capital to the partners, then the bank loan, then the loan to Ava.
E) The order of payment of debts does not matter.
Bank Loan
A sum of money lent by a bank to a borrower at a specified interest rate to be repaid with interest.
Partnership Debts
Obligations for which all partners are jointly responsible in a partnership setup, meaning each partner can be held accountable for the entire amount of the debt.
Initial Capital
The amount of money or assets used to start a business or investment.
- Comprehend the procedure and prioritization for debt repayment and asset distribution upon the dissolution of a partnership.
Verified Answer
MR
Learning Objectives
- Comprehend the procedure and prioritization for debt repayment and asset distribution upon the dissolution of a partnership.