PE 8-3B Bank reconciliation

The following data were gathered to use in reconciling the bank account of Bradford Company:

Balance per bank              $17,400
Balance per company records 5,765
Bank service charges          125
Deposit in transit              3,000
Note collected by bank with $360 interest 9,360
Outstanding checks       5,400

a. What is the adjusted balance on the bank reconciliation?
b. Journalize any necessary entries for Bradford Company based on the bank reconciliation.

Answer:

a. $15,000 as shown below.
             Bank section of reconciliation: $17,400 + $3,000 – $5,400 = $15,000              
            Company section of reconciliation: $5,765 + $9,360 – $125 = $15,000

b.
Miscellaneous Expense...................... 125  
              Cash ................................................. 125  
Cash.................................................... 9,360  
             Notes Receivable ......................................  9,000  
             Interest Revenue........................................  360

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