Safe bank for the balance due on the secured note and mortgage on risk’s warehouse

Employee salary claims

Year 1 federal income taxed due

Accountant’s fees outstanding

Utility bills outstanding

  Prior to the bankruptcy filing, but while insolvent, risk engaged in the following transactions:

On February 1, Year 2, Rusk repaid all corporate directors’ loans made to the corporation.

On May 1, Year 2, Rusk purchased raw materials for use in its manufacturing business ande paid cash to the supplier

 The statements below are related to the May 1 and February 1 transactions and several creditors.

I. The May 1 purchase and payment was not a preferential transfer because it was a transaction in the ordinary course of business

II. The May 1 purchase and payment was a preferential transfer because it occurred within 90 days of the filing of the petition

III. The February 1 repayments of the directors’ loans were preferential transfers even though the payments were made more than 90 days before the filing of the petition.

IV. The February 1 repayments of the directors’ aons were preferential traansfers because the payments were made to insiders.

Which of the above are correct?

A. I, III, IV

B. II, III, IV

C. II, IV

D. I, III