On January 10, 2022, Kingbird, Inc. sold merchandise on account to Tompkins for $8,180, terms n/30. On February 9, Tompkins gave Kingbird, Inc. a 7% promissory note in settlement of this account.
Prepare the journal entry to record the sale and the settlement of the accounts receivable.

Answer and Explanation:

The journal entries are shown below

Jan 10

Account receivable Dr $8,180

     To Sales revenue $8,180

(being goods sold on credit)

Here account receivable is debited as it increased the assets and credited the sales revenue as it also increased the revenue

Feb 9

7% Promissory note Dr $8,180

    To Account receivable $8,180

(Being note received is recorded)

Here Promissory note is debited and account receivable is credited

88 because 4 plus 4 equals 8. 40 plus 40 equals 80. 80 plus 8 equals 88

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