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A bank reconciliation proves the accuracy of the depositor's and the bank's records. The bank statement balance is adjusted for items such as outstanding checks and unrecorded deposits made on or before
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29 votes
29 votes
A bank reconciliation proves the accuracy of the depositor's and the bank's records. The bank statement balance is adjusted for items such as outstanding checks and unrecorded deposits made on or before the bank statement date but not reflected on the statement. The book balance is adjusted for items such as service charges, bank collections for the depositor, and interest earned on the account. The company's bank reconciliation at June 30 included interest earned in the amount of $150. Make the necessary journal entry .

User Zhengbli
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7 votes
7 votes

Answer:

Dr Cash/Bank Account $150

Cr Interest Income $150

Step-by-step explanation:

When the bank reconciliation ordinarily includes interest earned, it means that the bank to credited the account with the interest earned however this is yet to be recognized in the company's cash account.

Hence to recognize it, the accounts involved are the interest income account and the cash/bank account. the required entries are

Dr Cash/Bank Account $150

Cr Interest Income $150

Being entries to recognize interest earned

User Micer
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