Larrys Lawn sells gardening tools to wholesalers. Larrys records adjusting entries annually at December 31. During 2018, Larrys Lawn records the following transactions related to receivables occurred:

January 1 Sold merchandise to ABC and accepted a 2-year, $120,000 noninterest-bearing note due on December 31, 2019. The discount rate is 6%. Black used the effective interest method to recognize interest revenue on the note.

August 1 Sold merchandise to John Deere. for $15,000 and accepted an 8%, 6-month note. Principal and interest are due on January 31, 2019.

December 1 Sold merchandise to Husqavarna. and accepted a 3-month, $12,000 noninterest-bearing note due on February 28, 2019. The discount rate is 9%.

December 4 Sold merchandise to Soil Inc for $9,000 with terms 2/10, n/30. Soil Inc. used the gross method to record sales discounts.

December 12 Collected the amount due from Soil Inc.

December 31 Sold $80,000 of accounts receivable to Blue Bank without recourse. Blue Bank charged a1% finance

fee and retained 8% to cover possible adjustments.

a. Record each of the transactions above for Larrys Lawn. Ignore cost of goods sold.

b. Record December 31, 2018, adjusting entries for Larrys Lawn.

c. Larrys preliminary 2018 net income without the effects of the entries in a. and b. is $100,000. What is the correct 2018 net income? Ignore income taxes.