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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 $1,084 and No. 5893 for $498. Check No. 5893 was still outstanding as of September 30. The following information is available for its September 30 reconciliation.

From the September 30 Bank Statement

PREVIOUS BALANCE	TOTAL CHECKS AND DEBITS	TOTAL DEPOSITS AND CREDITS	CURRENT BALANCE
17,500	9,913	11,455	19,042

CHECKS AND DEBITS					DEPOSITS AND CREDITS
Date	No.	Amount			Date	Amount
09/03	5888	1,084			09/05	1,117
09/04	5902	765			09/12	2,278
09/07	5901	1,865			09/21	4,134
09/17		674	NSF		09/25	2,384
09/20	5905	930			09/30	22	IN
09/22	5903	360			09/30	1,520	CM
09/22	5904	2,082
09/28	5907	267
09/29	5909	1,886

From Chavez Company’s Accounting Records

Cash Receipts Deposited
Date		Cash Debit
Sept.	5		1,117
	12		2,278
	21		4,134
	25		2,384
	30		1,741
			11,654

Cash Payments
Check No.		Cash Credit
5901			1,865
5902			765
5903			360
5904			2,037
5905			930
5906			1,020
5907			267
5908			394
5909			1,886
			9,524

Cash			Acct. No. 101
Date	Explanation	PR	Debit	Credit	Balance
Aug. 31	Balance				15,918
Sept. 30	Total receipts	R12	11,654		27,572
30	Total payments	D23		9,524	18,048

Additional Information

1. (a) Check No. 5904 is correctly drawn for $2,082 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 $2,037.
2. (b) 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.
3. (c) The credit memorandum (CM) is from the collection of a $1,520 note for Chavez Company by the bank. The collection is not yet recorded.

2. Prepare 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.) View transaction list Journal entry worksheet 2 3 4 5 6 Record the entry related to the September 30 deposit, if required. Note: Enter debits before credits. Date General Journal Debit Credit Sept 30 Record entry Clear entry View general journal

Answer 1

Solution:

Journal Entries - Chavez Company
S. No.	Particulars	Debit	Credit
1	No Entry
2	Cash A/c Dr	$22.00
	To Interest Revenue		$22.00
	(Being interest credited by bank)
3	Cash A/c Dr	$1,520.00
	To Notes Receivables		$1,520.00
	(Being note collected by bank and collection fee charged)
4	No Entry
5	Accounts Receivables Dr	$674.00
	To Cash		$674.00
	(Being cheque dishonored by bank)
6	Computer Equipment Dr	$45.00
	To Cash		$45.00
	(Being entry recorded with short amount now corrected)