I need help with the final step. It says i have everything else correct but im at a loss for the final stepOn August 31, 2019, the balance in the checkbook and the Cash account of the Dry Creek Bed and Breakfast was $12,316. The balance shown on the bank statement on the same date was $13,217. NotesThe firm’s records indicate that a $1,490 deposit dated August 30 and a $705 deposit dated August 31 do not appear on the bank statement.A service charge of $7 and a debit memorandum of $340 covering an NSF check have not yet been entered in the firm’s records. (The check was issued by Art Corts, a credit customer.)The following checks were issued but have not yet been paid by the bank:  Check 712,$114 Check 713,$129 Check 716,$242 Check 736,$581 Check 739,$82 Check 741,$124    A credit memorandum shows that the bank collected a $2,104 note receivable and interest of $67 for the firm. These amounts have not yet been entered in the firm’s records. Required:Prepare a bank reconciliation statement for the firm as of August 31.Record general journal entries for items on the bank reconciliation statement that must be journalized.Analyze: *this is where I need help*What effect did the journal entries recorded as a result of the bank reconciliation have on the fundamental accounting equation?

Question
Asked Nov 16, 2019
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I need help with the final step. It says i have everything else correct but im at a loss for the final step

On August 31, 2019, the balance in the checkbook and the Cash account of the Dry Creek Bed and Breakfast was $12,316. The balance shown on the bank statement on the same date was $13,217.

 

Notes

  1. The firm’s records indicate that a $1,490 deposit dated August 30 and a $705 deposit dated August 31 do not appear on the bank statement.
  2. A service charge of $7 and a debit memorandum of $340 covering an NSF check have not yet been entered in the firm’s records. (The check was issued by Art Corts, a credit customer.)
  3. The following checks were issued but have not yet been paid by the bank:
     
 
Check 712, $ 114  
Check 713, $ 129  
Check 716, $ 242  
Check 736, $ 581  
Check 739, $ 82  
Check 741, $ 124  

 

  

  1. A credit memorandum shows that the bank collected a $2,104 note receivable and interest of $67 for the firm. These amounts have not yet been entered in the firm’s records.
     

Required:

  1. Prepare a bank reconciliation statement for the firm as of August 31.
  2. Record general journal entries for items on the bank reconciliation statement that must be journalized.


Analyze: *this is where I need help*
What effect did the journal entries recorded as a result of the bank reconciliation have on the fundamental accounting equation?

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Expert Answer

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Step 1

Required journal...

Debit
Post
Credit
Date
Description
(S)
(S)
Ref.
No Entry Required For Deposit-
in-Transit
Service fee
Cash
(to record the service fee)
|Account Receivable
340
Cash
340
(to record the returned check)
No Entry Required to record
outstanding checks
Cash
2171
Note Receivable
2104
67
Interest
(to record the note and interest
collected by the bank)
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Debit Post Credit Date Description (S) (S) Ref. No Entry Required For Deposit- in-Transit Service fee Cash (to record the service fee) |Account Receivable 340 Cash 340 (to record the returned check) No Entry Required to record outstanding checks Cash 2171 Note Receivable 2104 67 Interest (to record the note and interest collected by the bank)

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