Many businesses borrow money during periods of increased business activity to finance inventory an accounts...
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Accounting
Many businesses borrow money during periods of increased business activity to finance inventory an accounts receivable. Target Corporation is one of America's largest general merchandise retailers. Each Christmas, Target builds up its inventory to meet the needs of Christmas shoppers. A large portion of Christmas sales are on credit. As a result, Target often collects cash from the sales several months after Christmas. Assume that on November 1, 2015, Target borrowed $6 million cash from Metropolitan B and signed a promissory note that matures in six months. The interest rate was 8.0 percent payable at maturity. The accounting period ends December 31. 1. Indicate the accounts, amounts, and effects of the (a) issuance of the note on November 1; (b) impact of the adjusting entry on December 31, 2015; and (c) the payment of the note and interest on April 30 2016, on the accounting equation. (Do not round intermediate calculations. Enter your answers in whole dollars. Enter any decreases to account balances with a minus sign.) Date Assets Liabilities Stockholders' Equity November 1, 2015 December 31, 2015 April 30, 2016
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