Many businesses borrow money during periods of increased business activity to finance inventory and accounts receivable. Nordstrom, Inc., is one of America’s most prestigious retailers. Each Christmas season, Nordstrom builds up its inventory to meet the needs of Christmas shoppers. A large portion of these Christmas sales are on credit. As a result, Nordstrom often collects cash from the sales several months after Christmas. Assume that on November 1 of this year, Nordstrom borrowed $4.8 million cash from Bank of America to meet short-term obligations. Nordstrom signed an interest-bearing note and promised to repay the $4.8 million in six months. The annual interest rate was 8 percent. All interest will accrue and be paid when the note is due in six months. Nordstrom’s accounting period ends December 31.

Required:
1. Provide the journal entry to record the note on November 1.
2. Provide any adjusting entry required at the end of the annual accounting period on December 31.
3. Provide the journal entry to record payment of the note and interest on the maturity date, April 30.
4. If Nordstrom 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?