Zelda signs a promissory note for $500 to First Bank.At the request of both Zelda and the bank, Ann also signs the note as an accommodation maker.In this situation:

Question

Quizplus · Accepted Answer

Zelda, as the borrower, is primarily liable on the note. Ann, as the accommodation maker, is also liable on the note, but only after Zelda fails to pay. Therefore, Ann has secondary liability on the note, making choice (c) incorrect. Instead, choice (d) is correct as it acknowledges that both Zelda and Ann are liable on the note but with different levels of responsibility.

Zelda Signs a Promissory Note for $500 to First Bank