Question

Lng corporation and midstates utility company enter a contract for a sale of liquified natural gas. lng draws a draft unconditionally ordering midstates utility to pay $50,000 to lng's order in sixty days. midstates utility signs and dates the draft. refer to fact pattern 25-2a. this instrument is

Answer 1

The instrument is TRADE ACCEPTANCE.

Trade acceptance is defined as a time draft or bill of exchange for the amount of a specific purchase drawn by the seller on the buyer, bearing the buyer's acceptance, and often noting the place of payment.

In the above scenario, Lng is the seller. The company draws a time draft that specifies that Midstate utility will pay Lng Corp. 50,000 in 60 days for the sale of liquified natural gas.