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

Question

Quizplus · Accepted Answer

Amy, as an accommodation maker, and Franz both have primary liability on the note. This means they are equally and fully responsible for the repayment of the debt to ABC Bank.

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