Determining Financial Statement Effects of Transactions Involving Notes Payable Using the data from the previous exercise, complete the following requirements.
Required:
1. Determine the financial statement effects for each of the following: ( a ) issuance of the note on November 1, ( b ) the impact of the adjusting entry at the end of the accounting period, and ( c ) payment of the note and interest on April 30, 2012. Indicate the effects (e.g., cash + or ) using the following schedule:
2. If Neiman Marcus 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?
Date Assets Liabilities Stockholders’ Equity