Fact Pattern 30-1B
In January,Jazz Dance Studio owes Kay,its musical director,$1,800 for cur?rent wages,receives $700 as a down payment for dance lessons from Lora,and pays a Music,Inc. ,a sheet music supplier,$1,500 of $3,000 owed.In February,the studio files a petition in bankruptcy for relief through a liquidation.
-Refer to Fact Pattern 30-1B.The highest priority with respect to payment of claims belongs to

Question

Quizplus · Accepted Answer

Kay and Music, Inc. are both creditors with priority under the Bankruptcy Code. Kay is owed wages, which are considered priority claims, and Music, Inc. is owed for goods sold to the debtor in the ordinary course of business, which also has priority. Lora and unnamed general creditors do not have priority claims.

Fact Pattern 30-1B In January,Jazz Dance Studio Owes Kay,its Musical Director,$1,800 for Cur?rent