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. 28 Sold merchandise to Lennox, Inc., for $10,000 and accepted a 6%, 7-month note. 6% is an appropriate rate for this type of note. Mar. 31 Sold merchandise to Maddox Co. that had a fair value of $7,520, and accepted a noninterest-bearing note for which $8,000 payment is due on March 31, 2022. Apr. 3 Sold merchandise to Carr Co. for $5,500 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 $3,700. Evergreen reduced the customer’s receivable balance by $5,500, the sales price of the merchandise. Sales returns are recorded by the company as they occur. 30 Transferred receivables of $55,000 to a factor without recourse. The factor charged Evergreen a 2% 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 8%. The note was discounted without recourse. Sep. 30 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, 2021. Adjusting entries are only recorded at year-end. I only need help with June 30.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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.	28	Sold merchandise to Lennox, Inc., for $10,000 and accepted a 6%, 7-month note. 6% is an appropriate rate for this type of note.
Mar.	31	Sold merchandise to Maddox Co. that had a fair value of $7,520, and accepted a noninterest-bearing note for which $8,000 payment is due on March 31, 2022.
Apr.	3	Sold merchandise to Carr Co. for $5,500 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 $3,700. Evergreen reduced the customer’s receivable balance by $5,500, the sales price of the merchandise. Sales returns are recorded by the company as they occur.
	30	Transferred receivables of $55,000 to a factor without recourse. The factor charged Evergreen a 2% 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 8%. The note was discounted without recourse.
Sep.	30	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, 2021. Adjusting entries are only recorded at year-end.

I only need help with June 30.

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