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Loans

Paula's Precision Book Printing Company has decided to add binding the books to its services. Since the binding equipment is quite expensive, Paula borrows the money to purchase it. Paula borrows $20,000 from Ocean Vista Bank. To loan her the money, the bank will charge Paula interest at the rate of 6 percent. In addition, Paula pledges the printing presses that she owns as collateral. This means that if she doesn't make her payments, the bank can take her printing presses.


Promissory Note

Ocean Vista, California May 17, 20XX

I promise to pay Ocean Vista Bank (Obligee) the principal sum of

twenty thousand and no/100 ----- dollars plus interest at the rate of

6 percent. Payments will be made in installments of one thousand and

no/100 ----- dollars on the first day of each month beginning July 1,

200X, continuing until said principal and interest have been paid.

   As collateral, Paula's Precision Book Printing Company pledges its three

Vandenberg printing presses. If any installment is not paid when due, Ocean Vista

Bank may take possession of the three printing presses.



Borrower (Obligor)


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