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Evergreen Company sells lawn and garden products to wholesalers. The company's fiscal year-end is December 31. During 2018, the following transactions related to receivables occurred: Feb. 28 Sold merchandise to Lennox, Inc. for $20,000 and accepted a 12%, 7-month note. 12% is an appropriate rate for this type of note. Mar. 31 Sold merchandise to Maddox Co. and accepted a noninterest-bearing note with a discount rate of 12%. The $18,eee payment is due on March 31, 2019. Apr. 3 Sold merchandise to Carr Co. for $17,000 with terms 4/10, n/38. Evergreen uses the gross method to account for cash discounts. 11 Collected the entire amount due from Carr Co. 17 A customer returned merchandise costing $4,700. Evergreen reduced the customer's receivable balance by $6,50e, the sales price of the merchandise. Sales returns are recorded by the company as they occur. 30 Transferred receivables of $65,eee to a factor without recourse. The factor charged Evergreen a 3% finance charge on the receivables transferred. The sale criteria are met. June 30 Discounted the Lennox, Inc., note at the bank. The bank's discount rate is 14%. The note was discounted without recourse. Sep. 38 Lennox, Inc., paid the note amount plus interest to the bank. Required: 1. Prepare the necessary journal entries for Evergreen for each of the above dates. For transactions involving the sale of merchandise, ignore the entry for the cost of goods sold 2. Prepare any necessary adjusting entries at December 31, 2018. Adjusting entries are only recorded at year-end. 3. Prepare a schedule showing the effect of the journal entries on 2018 income before taxes Complete this question by entering your answers in the tabs below. View transaction list Journal entry worksheet 1 2 3 4 5 6 7 8 9 10 > Sold merchandise to Lennox, Inc. for $20,000 and accepted a 12%, 7-month note. 12% is an appropriate rate for this type of note. Note: Enter debits before credits General Journal Debit Credit Date February 28, 2018 Record entry Clear entry View general journal Journal entry worksheet 1 2 3 4 5 6 7 8 9 10 > Sold merchandise to Maddox Co. and accepted a noninterest-bearing note with a discount rate of 12%. The $18,000 payment is due on March 31, 2019. Note: Enter debits before credits. General Journal Debit Credit Date March 31, 2018 Record entry Clear entry View general journal Required 2 > Journal entry worksheet Sold merchandise to Carr Co. for $17,000 with terms 4/10, n/30. Evergreen uses the gross method to account for cash discounts. Note: Enter debits before credits General Journal Debit Credit Date April 03, 2018 + Record entry Clear entry View general Journal Journal entry worksheet Journal entry worksheet 7 8 9 10 > Evergreen reduced the customer's receivable balance by $6,500, the sales price of the merchandise. Sales returns are recorded by the company as they occur. Note: Enter debits before credits. General Journal Debit Credit Date April 17, 2018 Record entry Clear entry View general journal Required 2 > Journal entry worksheet A customer returned merchandise costing $4,700. Note: Enter debits before credits General Journal Debit Credit Date April 17, 2018 Record entry Clear entry View general journal 1 2 3 4 5 8 9 10 > Transferred receivables of $65,000 to a factor without recourse. The factor charged Evergreen a 3% finance charge on the receivables transferred. The sale criteria are met. Note: Enter debits before credits Date General Journal Debit Credit April 30, 2018 Record entry Clear entry View general journal Required 2 > Journal entry worksheet 1 2 3 4 5 6 7 Discounted the Lennox, Inc., note at the bank. The bank's discount rate is 14%. The note was discounted without recourse. Note: Enter debits before credits. General Journal Debit Credit Date June 30, 2018 Record entry Clear entry View general journal Journal erily WUIKSileet Required 1 Required 2 Required 3 Prepare any necessary adjusting entries at December 31, 2018. Adjusting entries are only recorded at year-end. (If n for a transaction/event, select "No journal entry required in the first account field.) View transaction list Journal entry worksheet Record accrued interest at December 31, 2016. Note: Enter debits before credits Date December 31, 2018 General Journal Debit Credit Record entry Clear entry View general Journal 3. Prepare a schedule snowing the erect or the journal entries on 2018 income verore taxes. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare a schedule showing the effect of the journal entries on 2018 income before taxes. (Decreases with a minus sign. Do not round intermediate calculations. Round your final answers to the nearest w Income Date increase (decrease) February 28 March 31 April 3 April 11 April 17 April 17 April 30 June 30 June 30 December 31 Total effect $ 0

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