Refer to the previous exercise.

Required:1. Determine the financial statement effects for each of the following transactions: (a) issuance of the note on November 1, 2017, (b) impact of the adjusting entry at December 31, 2017, and (c) the payment of the note and interest on April 30, 2018. Indicate the accounts affected, amounts, and direction of the effects (+ for increases and - for decreases) on the accounting equation. Use the following headings:

2. If Sears 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?

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Shareholders' Equity Liabilities Date Assets