Question

Sophie issues a promissory note made "payable to the order of Molly." Molly indorses the note by signing her name and gives the note to Dana. Which of the following is correct?

a. Sophie issued a bearer instrument and Molly kept it in bearer form.
b. Sophie issued an order instrument,but Molly changed it to bearer form.
c. Sophie issued an order instrument and Molly kept it in order form.
d. Sophie issued a bearer instrument and Molly changed it to bearer form.

Answer 1

Answer: b. Sophie issued an order instrument, but Molly changed it to bearer form

Step-by-step explanation:

An order instrument is an instrument that is payable to a specific individual that's referred to as a payee or any person the payee designates to carry out the payment. They require a signature as a means of authorization of transaction, an example of this order of payment is a cheque.

Bearer form indicates a form that the owner of such item is to claim teir goods, item or services.