Question

On August 31, 2021, the general ledger of The Dean Acting Academy shows a balance for cash of $7,794. Cash receipts yet to be deposited into the checking account total $3,188, and checks written by the academy but not yet processed by the bank total $1,275. The company's balance of cash does not reflect a bank service fee of $20 and interest earned on the checking account of $31. These amounts are included in the balance of cash of $5,892 reported by the bank as of the end of August.

Answer 1

1)Bank reconciliation statement is as follows:

   Dean Acting Academy

   Bank reconciliation statement

For the year ended August 31, 2021

	$
Balance as per bank Records	5,892
Add: Deposit in Transit	3,188
Less: Outstanding checks	( 1,275)
Adjusted Bank Balance	7,805
Balance as per book Records	7,794
Add: Interest Earned	31
Less:Bank Service Fees	(20)
Adjusted Cash Balance	7,805

2) Journal entries are as follows:

Date	Account and Explanation	Debit ($)	Credit($)
Aug. 31, 2021	Cash	31
	Interest Revenue		31
	(Recorded the collection of Interest Revenue)
Aug. 31, 2021	Bank service fee	20
	Cash		20
	(Recorded the Bank service fee )