Question

On August 31, 2019, the balance in the checkbook and the Cash account of the Dry Creek Bed and Breakfast was $12,981. The balance shown on the bank statement on the same date was $13,897. Notes The firm’s records indicate that a $1,500 deposit dated August 30 and a $701 deposit dated August 31 do not appear on the bank statement. A service charge of $8 and a debit memorandum of $270 covering an NSF check have not yet been entered in the firm’s records. (The check was issued by Art Corts, a credit customer.) The following checks were issued but have not yet been paid by the bank: Check 712, $ 110 Check 713, $ 125 Check 716, $ 238 Check 736, $ 577 Check 739, $ 78 Check 741, $ 120 A credit memorandum shows that the bank collected a $2,094 note receivable and interest of $53 for the firm. These amounts have not yet been entered in the firm’s records. Required: Prepare a bank reconciliation statement for the firm as of August 31. Record general journal entries for items on the bank reconciliation statement that must be journalized. Analyze: What effect did the journal entries recorded as a result of the bank reconciliation have on the fundamental accounting equation?

Answer 1

Journal Entry to record the trnsaction in books :

Date	Account	Debit	Credit
31-Aug-19	Bank charges	8.00
	Bank charges	270.00
	Bank		278.00
	(To record Bank charges for $8 and NSF charges $270)
31-Aug-19	Bank	2,147.00
	Note Receivable		2,094.00
	Interest on Note receivable		53.00
	(To record reciept of note & interest in bank account)

Bank Reconciliation Statement as on 31st Aug 2019 :

The balance as per book will get updated to $14,850 after journal entry (129,81-278+2,147)

	Particulars	Amount
	Balance as per book	14,850.00
Less	Amount deposited but not appearing in bank
	30-Aug	1,500.00
	31-Aug	701.00
Add	Cheque issued but not cleared
	712	110.00
	713	125.00
	716	238.00
	736	577.00
	739	78.00
	741	120.00
	Balance as per Bank Statement	13,897.00