Many businesses borrow money during periods of increased business activity to finance inventory and accounts receivable. Dayton Hudson is one of America's largest general merchandise retailers. Each Christmas, Dayton Hudson builds up its inventory to meet the needs of Christmas shoppers. A large portion of Christmas sales are on credit. As a result, Dayton Hudson often collects cash from the sales several months after Christmas. Assume that on November 1, 2003, Dayton Hudson borrowed $4.5 million cash from Metropolitan Bank for working capital purposes and signed an interest-bearing note due in six months. The interest rate was 10 percent per annum payable at maturity. The accounting period ends December 3 1

.

Required: 1. Give the journal entry to record the note on November 1

. 2. Give any adjusting entry required at the end of the annual accounting period. 3. Give the journal entry to record payment of the note and interest on the maturity date, April 30, 2004. 4. If Dayton Hudson needs extra cash during every Christmas season, should management borrow money on a long-term basis to avoid the necessity of negotiating a new short-term loan each year?