Question

A company's Cash account shows a balance of $3,400 at the end of the month. Comparing the company's Cash account with the monthly bank statement reveals several additional cash transactions such as bank service fees ($60), an NSF check from a customer ($370), a customer's note receivable collected by the bank $(2,000), and interest earned $(150). Prepare the necessary entries to adjust the balance of cash. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Answer 1

Balance Cash Adjusted CASH $5,860

Step-by-step explanation:

CASH $3,400

bank service fees ($60) >>> The banks' fees must be record as expenses.

Bank Expenses $60 Debit

CASH $60 Credit

NSF check from a customer ($370) >>> A collection made to a client, it means we have a balance in the accounts receivable.

CASH $370 Debit

Accounts Receivables $370 Credit

Customer's note receivable collected by the bank $(2,000) >>> A collection of a note receivable made by the bank, it means we have a balance as note receivable in the balance sheets.

CASH $2000 Debit

Note Receivable $2000 Credit

interest earned $(150) >>> The interest earned had to be recognize in the income statement as income statement.

CASH $150 Debit

Interest Income $150 Credit

CASH $5860