Question

EA8. LO 8.6 Prepare the journal entry to reconcile the bank statement in Exercise 8.7 EA9. LO 8.6 Using the following information, prepare a bank reconciliation Bank balance: $4,587 Book balance: $5,577 Deposits in transit: $1,546 Outstanding checks: $956 Interest income: $56 NSF check: $456

Answer 1

The bank reconciliation statement is shown as follows:- (Amounts in $)

Bank Balance	4,587
Add: Deposits in Transit	1,546
	6,133
Less: Outstanding Checks	956
Adjusted Bank Balance	5,177
Book Balance	5,577
Add: Interest Income	56
	5,633
Less: NSF Check	456
Adjusted Book balance	5,177

Notes:-

1) Deposits in transit and outstanding checks are already adjusted in books therefore adjusted from bank balance for calculating adjusted bank balance.

2) Interest income is not credited in books therefore credited in cash and NSF check is the check returned due to non sufficient funds. (received from accounts receivable)

Journal Entry to reconcile the bank statement is shown as follows:- (Amounts in $)

No	Account Titles	Debit	Credit
1	Cash	56
	Interest Income		56
	(To record the interest income)
2	Accounts Receivable	456
	Cash		456
	(To record the NSF check)