Question

Roper Electronics received its bank statement from Northern Regional Bank for the month of August with a balance of $11,740.00 as of August 31.

Northern Regional Bank also collected a $5,000.00 notes receivable from Roper Electronic's customer on August 1. The customer owed interest on the receivable for the period March 1 to August 1 at 12% annual interest. Northern Regional Bank charged a $35.00 fee for the collection service.The bank statement reveals a bank service charge of $20.00. A customer check for $68.00 was returned with the bank statement marked “NSF”. None of the transactions described in this paragraph have been recorded by Roper Electronics on its general ledger.

Roper Electronics determined that check #613 for $155.00 and check #601 for $420.00 were both outstanding. A $6,900 deposit made on August 30 was outstanding as of the end of the month. The ending balance of the Roper cash account is $12,938.00.

In the space below, record the journal entry for the interest earned on the $5,000 note receivable that the bank collected from the customer.

Answer 1

	Roper Electronics
	Bank Reconciliation
	August 31
	Cash balance according to bank statement		$11,740
	Add: Deposits in transit		$6,900
			$18,640
	Deduct: Outstanding checks:
	#601	$420
	#613	$155	$575
	Adjusted Balance		$18,065
	Cash balance according to Roper Electronics		$12,938
	Add: Note and interest collected by bank		$5,250
			$18,188
	Deduct: Check returned because of insufficient funds	$68
	Collection fee	$35
	Monthly account fee	$20	$123
	Correct cash balance, September 30		$18,065
	Account Titles and Explanation	Debit	Credit
1	Cash	$5,215
	Miscellaneous Expense	$35
	Notes Receivable		$5,000
	Interest Revenue		$250
2	Miscellaneous Expense	$20
	Cash		$20
3	Accounts Receivable	$68
	Cash		$68