Question

Clayborn Company' bank reconciliation as of May 31 is shown below. Bank balance $ 15,800 Book...

Clayborn Company' bank reconciliation as of May 31 is shown below.

Bank balance

$

15,800

Book balance

$

17,025

+ Deposit in transit

5,200

Bank service fees

−25

− Outstanding checks

−4,600

NSF returned

−600

Adjusted bank balance

$

16,400

Adjusted book balance

$

16,400


One of the adjusting journal entries that Clayborn must record as a result of the bank reconciliation includes:

A debit to cash of $25

A debit to Cash of $625

A debit to Cash of $5,200

A credit to Cash of $600

A credit to Cash of $4,600

Homework Answers

Answer #1
Deposit in transit and Outstanding checks do not require adjusting journal entries
Two adjusting entries are required:
Debit Credit
Bank service fees expense 25
          Cash 25
(To record Bank service fees)
Debit Credit
Accounts Receivable 600
          Cash 600
(To record NSF returned)
A credit to Cash of $600 is correct option
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