Classify each of the following voluntary settlements as an extension, a composition, or a combination of the two.

a.Paying all creditors

24

cents on the dollar in exchange for complete discharge of the debt.

b.Paying all creditors in full in three periodic installments.

c.Paying a group of creditors with claims of

$10,000

in full over 2 years and immediately paying the remaining creditors

60

cents on the dollar.

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Part 1

a.Paying all creditors

24

cents on the dollar in exchange for complete discharge of the debt.(Select the best answer below.)

The settlement is:

A.

an extension.

B.

a composition.

C.

a combination.