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Many businesses borrow money during periods of increased business activity to finance inventory and trade receivables. Nordstrom, Assessment Tool iFrame 7 America's most prestigious retailers.
Many businesses borrow money during periods of increased business activity to finance inventory and trade receivables. Nordstrom, Assessment Tool iFrame 7 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.)
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