Question

Oscar's Red Carpet Store maintains a checking account with Academy Bank. Oscar's sells carpet each day but makes bank deposits only once per week. The following provides information from the company's cash ledger for the month ending February 28, 2021. Deposits: Date 2/4 2/11 2/18 2/25 2/26-2/28 Amount $ 2,300 Checks: 1,900 2,800 3,700 1,200 $ 11,900 No. 321 322 323 324 325 Date 2/2 2/8 2/12 2/19 2/27 2/28 2/28 Amount $ 4,300 600 2,100 1,800 400 Cash receipts: 326 327 900 1,500 $11,600 Balance on February 1 Receipts Disbursements Balance on February 28 $ 6,400 11,900 (11,600) $ 6,700 Information from February's bank statement and company records reveals the following additional information: a. The ending cash balance recorded in the bank statement is $10,390. b. Cash receipts of $1,200 from 2/26-2/28 are outstanding. c. Checks 325 and 327 are outstanding. d. The deposit on 2/11 includes a customer's check for $400 that did not clear the bank (NSF check). e. Check 323 was written for $2,800 for advertising in February. The bank properly recorded the check for this amount. f. An automatic withdrawal for Oscar's February rent was made on February 4 for $1,300. g. Oscar's checking account earns interest based on the average daily balance. The amount of interest earned for February is $160. h. In January, one of Oscar's suppliers, Titanic Fabrics, borrowed $5,200 from Oscar. On February 24, Titanic paid $5,350 ($5,200 borrowed amount plus $150 interest) directly to Academy Bank in payment for January's borrowing. i. Academy Bank charged service fees of $120 to Oscar's for the month.

Part 2: Record the necessary cash adjustments

Answer 1

No.	Transaction	General Journal	Debit	Credit
1	1	Cash	5,510
		Interest Revenue		310
		Note Receivable		5,200
2	2	Accounts Receivable	400
		Advertising Expense	700
		Rent Expense	1,300
		Service Fees Expense	120
		Cash		2,520