Evergreen Company sells lawn and garden products to wholesalers.The company's fiscal year-end is December 31. During 2021, thefollowing transactions related to receivables occurred:

Feb.		28		Sold merchandise to Lennox, Inc., for $12,000 and accepted a 8%,7-month note. 8% is an appropriate rate for this type of note.
Mar.		31		Sold merchandise to Maddox Co. that had a fair value of $7,452,and accepted a noninterest-bearing note for which $8,100 payment isdue on March 31, 2022.
Apr.		3		Sold merchandise to Carr Co. for $7,100 with terms 3/10, n/30.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 $3,300. Evergreenreduced the customer’s receivable balance by $5,100, the salesprice of the merchandise. Sales returns are recorded by the companyas they occur.
		30		Transferred receivables of $51,000 to a factor withoutrecourse. The factor charged Evergreen a 2% finance charge on thereceivables transferred. The sale criteria are met.
June		30		Discounted the Lennox, Inc., note at the bank. The bank’sdiscount rate is 10%. The note was discounted without recourse.
Sep.		30		Lennox, Inc., paid the note amount plus interest to thebank.

Required:
1. Prepare the necessary journal entries forEvergreen for each of the above dates. For transactions involvingthe sale of merchandise, ignore the entry for the cost of goodssold.
2. Prepare any necessary adjusting entries atDecember 31, 2021. Adjusting entries are only recorded atyear-end.
3. Prepare a schedule showing the effect of thejournal entries on 2021 income before taxes.

• Sold merchandise to Lennox, Inc. for $12,000 and accepted a 8%,7-month note. 8% is an appropriate rate for this type ofnote.
• 2
  Sold merchandise to Maddox Co. and accepted a noninterest-bearingnote with a discount rate of 8%. The $8,100 payment is due on March31, 2021.
• 3
  Sold merchandise to Carr Co. for $7,100 with terms 3/10, n/30.Evergreen uses the gross method to account for cashdiscounts.
• 4
  Collected the entire amount due from Carr Co.
• 5
  Evergreen reduced the customer’s receivable balance by $5,100, thesales price of the merchandise. Sales returns are recorded by thecompany as they occur.
• 6
  A customer returned merchandise costing $3,300.
• 7
  Transferred receivables of $51,000 to a factor without recourse.The factor charged Evergreen a 2% finance charge on the receivablestransferred. The sale criteria are met.
• 8
  Record the accrual of four months of interest on the notereceivable issued on February 28.
• 9
  Discounted the Lennox, Inc., note at the bank. The bank’s discountrate is 10%. The note was discounted without recourse.
• 10
  Lennox, Inc., paid the note amount plus interest to the bank.