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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Sagar
Transcribed Image Text:Mar Assessment Tool iFrame money during periods of increased business activity to finance inventory and trade receivables. Nordstrom,
Inc., is one of Nor 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
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)
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