The oak tree company sells lawn and garden products to wholesalers. the company's fiscal year-end is December 31st. During 2021, the following transactions related to receivable occurred.

1.

February 28th sold merchandise to Carter Incorporated for $40,000 and accepted a 12% ,7th month note .12% is an appropriate rate for this type of note.

2. March 31st sold merchandise to Lenny and corporation that had a fair value of $24,640 ,accepted a non-interest-bearing note for which 28000 payment is due on March 31st 2022.

3. April 3rd sold merchandise to Carrie and Company for $20,000 with terms 2/10, and n/ 30. Carrie and company uses the gross method to account for cash discounts

4. April 11th Collected the entire amount due from Carrie and Company

5. April 17th a customer returned merchandise costing $3,800 the oak tree reduced the customers receivable balance by 5600 the sales price of the merchandise. sales returns are recorded by the company as they occur.

6. April 30th transferred receivables of 56002 a factor without recourse. If The factor charged Oaktree a 1% finance charge on the receivables transferred. The sale criteria are met.

7. June 30th discounted Carter & Company a note at the bank. The bank's discount rate is 14%. The note was discounted without recourse.

8. Carter & Company paid the note amount plus interest to the bank September 30th.

Required

1. Prepare the necessary journal entries for oak tree Company for each of the above dates for transactions involving the sale of merchandise ignore the entry up for the cost of goods sold.

2. Prepare any necessary adjusting entries for December 31st 2021.

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

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