In a voluntary settlement, one group of creditors having claims of $1,000,000 will be immediately paid 95 cents on the dollar. The remainder of the creditors will postpone payment an additional 60 days. This is an example of
A) a composition.
B) a combination of a composition and extension.
C) an extension.
D) a liquidation.

Question

Quizplus · Accepted Answer

This is a combination of a composition (paying one group of creditors immediately) and an extension (postponing payment for another group of creditors).

In a Voluntary Settlement, One Group of Creditors Having Claims