Value for holder in due course purposes


Don, who owed Dan $1,000 for his share of the cost of a fishing trip they took together 2 years ago, transferred to Dan a check for $700 that he had just received from a customer. Has Dan given value for holder in due course purposes?

A. Yes, because accepting an instrument in payment of a prior debt is considered to be value given for holder in due

course purposes.
B. Yes, but only if Dan still intends to collect the remaining $300 from Don.

C. No, because the check was less than the amount of the debt.

D. No, because the check was from a business transaction and the debt was personal.

E. No, because Don had a preexisting duty to pay Dan the $1,000.

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Accounting Basics: Value for holder in due course purposes
Reference No:- TGS084248

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