Mar Tool iFrame money during periods of increased business activity to finance inventory and trade receivables. Nordstrom, Assessment Tool iFrame Inc., is one of NU America's most prestigious retailers. Each year, the company builds up its inventory to meet the needs of December holiday shoppers. Assume that on November 1, 2023, the company borrowed $4.5 million cash from the bank for working capital purposes and signed an interest-bearing note due in six months. The interest rate was 5 percent per year, payable at maturity. Nordstrom's fiscal year ends on December 31. Required: 1. Determine the financial statement effects for each of the following transactions: (a) issuance of the note on November 1, 2023, (b) impact of the adjusting entry at December 31, 2023, and (c) the payment of the note and interest on April 30, 2024. (Enter your answers in thousands. Enter any decrease in account balances with a minus sign. Round the final answers to 1 decimal place.) Date Nov. 1, 2023 Dec. 31, 2023 Apr. 30, 2024 Cash Cash Assets 4,500,000.0 4,612,500.0 X Notes payable Interest payable Interest payable Notes payable Liabilities ✓ ✓ ✓ 4,500,000.0 37,500.0 X (37,500.0) X (4,500,000.0) X Shareholders' Equity Interest expense Interest expense (37,500.0) X (75,000.0) X

Mar Tool iFrame money during periods of increased business activity to finance inventory and trade receivables. Nordstrom, Assessment Tool iFrame Inc., is one of NU America's most prestigious retailers. Each year, the company builds up its inventory to meet the needs of December holiday shoppers. Assume that on November 1, 2023, the company borrowed $4.5 million cash from the bank for working capital purposes and signed an interest-bearing note due in six months. The interest rate was 5 percent per year, payable at maturity. Nordstrom's fiscal year ends on December 31. Required: 1. Determine the financial statement effects for each of the following transactions: (a) issuance of the note on November 1, 2023, (b) impact of the adjusting entry at December 31, 2023, and (c) the payment of the note and interest on April 30, 2024. (Enter your answers in thousands. Enter any decrease in account balances with a minus sign. Round the final answers to 1 decimal place.) Date Nov. 1, 2023 Dec. 31, 2023 Apr. 30, 2024 Cash Cash Assets 4,500,000.0 4,612,500.0 X Notes payable Interest payable Interest payable Notes payable Liabilities ✓ ✓ ✓ 4,500,000.0 37,500.0 X (37,500.0) X (4,500,000.0) X Shareholders' Equity Interest expense Interest expense (37,500.0) X (75,000.0) X

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter6: Managing Cash Flow

Section: Chapter Questions

Problem 13SEP

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Many businesses borrow money during periods of increased business activity to finance inventory and accounts receivable. For example, Mitt builds up its inventory to meet the needs of retailers selling to Christmas shoppers. A large portion of Mitt's sales are on credit. As a result, Mitt often collects cash from its sales several months after Christmas. Assume on November 1, 2018, Mitt borrowed $6.5 million cash from Metropolitan Bank and signed a promissory note that matures in six months. The interest rate was 6.00 percent payable at maturity. The accounting period ends December 31. how would i make the three journal entires for the statement above
Many businesses borrow money during periods of increased business activity to finance inventory and accounts receivable. For example, Mitt builds up its inventory to meet the needs of retailers selling to Christmas shoppers. A large portion of Mitt's sales are on credit. As a result, Mitt often collects cash from its sales several months after Christmas. Assume on November 1, 2018, Mitt borrowed $6.5 million cash from Metropolitan Bank and signed a promissory note that matures in six months. The interest rate was 6.00 percent payable at maturity. The accounting period ends December 31. Required: 1, 2 & 3. Prepare the required journal entries to record the note on November 1, 2018, interest on the maturity date, April 30, 2019, assuming that interest has not been recorded since December 31, 2018. (Enter your answers in whole dollars. If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) 1. Record the borrowing of $6,500,000.…
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