Franz signs a $1,000 note payable to ABC Bank.If, to help Franz get the loan approved, Amy also signs the note as an accommodation maker:
A)Amy's liability is the same as that of an accommodation indorser on a check.
B)the liability of each party to the bank is: Franz $500 and Amy $500.
C)Amy has secondary liability on the note.
D)Amy and Franz both have primary liability on the note.

Question

Quizplus · Accepted Answer

As an accommodation maker, Amy has primary liability on the note along with Franz, meaning both are equally responsible for the debt to the bank.

Franz Signs a $1,000 Note Payable to ABC Bank