Question

Problem 6-5A (Algo) Preparing a bank reconciliation and recording adjustments LO P3 (The following information applies to the questions displayed below.) 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 $1,016 and No. 5893 for $509. 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 19,500 TOTAL CHECKS AND DEBITS 9,834 TOTAL DEPOSITS AND CREDITS CURRENT BALANCE 11,624 21,290 CHECKS AND DEBITS DEPOSITS AND CREDITS Date No. Amount Date Amount 09/03 5888 1,016 09/05 1,133 09/04 5902 754 09/12 2,237 09/07 5901 1,868 09/21 4,199 09/17 669 NSF 09/25 2,372 09/20 5905 937 09/30 23 IN 09/22 5903 357 09/30 1,660 CM 09/22 5904 2,143 09/28 5907 219 09/29 5909 1,871 From Chavez Company's Accounting Records Cash Receipts Deposited Cash Date Debit Sept. 5 1,133 12 2,237 21 4,199 25 2,372 30 1,783 11,724

1.Record the entry related to the September 30 deposit, if required.

2. Record the entry related to interest earned, if required.

3. Record the entry related to the note receivable and the collection, if required.

4. Record the entry related to the outstanding checks, if required.

5.Record the entry related to the NSF check, if required.

6.Record the entry related to the error on check 5904, if required.

Answer 1

Chavez COMPANY
Bank Reconciliation
Bank statement balance		$21,290	Book balance		20,220
Add:			Add:
Deposit of July 31	1,783		Proceeds from note	1,660
		1,783	Interest earned	23	1,683
		23,073			21,903
Deduct:			Deduct:
Check No. 5893	509		NSF check including fee	669
Check No. 5906	1,004		Error (Check 5904) 2143-2100	43
Check No. 5908	369
		1,882			712
Adjusted bank balance		21,191	Adjusted book balance		21,191

Transaction	General Journal	Debit	Credit
1	No journal entry required
2	Cash	23
	Interest earned		23
3	Cash	1,660
	Notes receivable		1,660
4	No journal
5	Accounts receivable—S. Nilson	669
	Cash		669
6	Computer equipment (Misc expen)	43
	Cash		43