A business purchases an airplane from an airplane manufacturer. The business obtains a loan to purchase the airplane from a bank, which obtains a security interest in the airplane. The airplane manufacturer is paid for the airplane out of the proceeds of the loan. This is a(n) ________ transaction.

Question

Quizplus · Accepted Answer

This is a three-party secured transaction because it involves the business, the bank, and the airplane manufacturer. The bank has a security interest in the airplane as collateral for the loan, and the airplane manufacturer is paid from the proceeds of the loan.

A Business Purchases an Airplane from an Airplane Manufacturer