Acorn Marina Inc

Multiple Choice

Acorn Marina Inc.sells and services boat motors.On April 1,1989,Acorn financed the purchase of its entire inventory with GAC Finance Company.GAC required Acorn to execute a security agreement and financing statement covering the inventory and proceeds of sale.On April 14,1989,GAC filed the financing statement pursuant to the UCC.On April 27,1989,Acorn sold one of the motors to Mike for use in his charter business.Mike,who had once worked for Acorn,knew that Acorn regularly financed its inventory with GAC.Acorn has defaulted on its obligations to GAC.The motor purchased by Mike is:

A) subject to the GAC security interest because he should have considered the fact that GAC financed the inventory purchased by Acorn.
B) subject to the GAC security interest because he purchased the motor for commercial use.
C) not subject to the GAC security interest because he is regarded as a buyer in the ordinary course of Acorn's business.
D) not subject to the GAC security interest because GAC failed to file the financing statement until more than 10 days after April 1,1989.