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

Feb.28Sold merchandise to Lennox, Inc., for $30,000 and accepted a 8%, 7-month note. 8% is an appropriate rate for this type of note.

Mar.31Sold merchandise to Maddox Co. that had a fair value of $20,240, and accepted a noninterest-bearing note for which $22,000 payment is due on March 31, 2022.

Apr.3Sold merchandise to Carr Co. for $20,000 with terms 2/10, n/30. Evergreen uses the grossmethod to account for cash discounts.

11Collected the entire amount due from Carr Co.17A customer returned merchandise costing $4,300. Evergreen reduced the customer's receivable balance by $6,100, the sales price of the merchandise. Sales returns are recorded by the company as they occur.30Transferred receivables of $61,000 to a factor without recourse. The factor charged Evergreen a 1% finance charge on the receivables transferred. The sale criteria are met.June30Discounted the Lennox, Inc., note at the bank. The bank's discount rate is 10%. The note was discounted without recourse.

Sep.30Lennox, 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. any necessary adjusting entries at December 31, 2021. Adjusting entries are only recorded at year-end.

3.a schedule showing the effect of the journal entries on 2021 income before taxes.