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An estate of a decedent who died intestate comprises: real property appraised at 1,600,000, subject to a mortgage of 1,000,000; cash in bank 400,000; and jewelry 100,000. Debts against the estate: funeral expenses 40,000; administration expenses 60,000; taxes due 200,000; unsecured creditors Alpha Co. 500,000; Beta Co. 200,000. An interim administrator has been appointed and a petition for settlement of the estate is filed under Rule 88. (a) State the controlling rule and the general order of payment of debts of the estate under Rule 88. (b) Apply the facts: determine how the assets should be applied to satisfy claims, identify the amounts payable to each creditor, and indicate whether any residue remains for the heirs. (c) If the secured debt were to exceed the value of the security, explain how the deficiency is treated and its effect on unsecured creditors and the estate’s distribution. Which of the following statements is correct?