Chavez Company most recently reconciled its bank statement and book balances of
ID: 2573704 • Letter: C
Question
Chavez Company most recently reconciled its bank statement and book balances of cash on August 31 and it reported two checks outstanding, No. 5888 for $1,065 and No. 5893 for $519. The following information is available for its September 30, 2017, reconciliation.
From the September 30 Bank Statement
From Chavez Company’s Accounting Records
Additional Information
Check No. 5904 is correctly drawn for $2,133 to pay for computer equipment; however, the recordkeeper misread the amount and entered it in the accounting records with a debit to Computer Equipment and a credit to Cash of $2,091. The NSF check shown in the statement was originally received from a customer, S. Nilson, in payment of her account. Its return has not yet been recorded by the company. The credit memorandum is from the collection of a $1,520 note for Chavez Company by the bank. The bank deducted a $16 collection fee. The collection and fee are not yet recorded.
2. Prepare the journal entries to adjust the book balance of cash to the reconciled balance. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Explanation / Answer
Date Account Debit credit 1 computer equipment 42 cash 42 [being error in recording 2133-2091] 2 Accounts receivable 644 cash 644 [NSF returned] 3 Cash 1504 Bank charges 16 Note receivable 1520 [Note collected] 4 cash 21 Interest revenue 21