On May 31, the Cash in Bank account of James Company, a sole proprietorship, had a balance of \(\$ 5,950.30\). On that date, the bank statement indicated a balance of \(\$ 7,868.50\). A comparison of returned checks and bank advices revealed the following:

1. Deposits in transit May 31 totaled \(\$ 2,603.05\).

2. Outstanding checks May 31 totaled \(\$ 3,152.45\).

3. The bank added to the account \(\$ 19.80\) of interest income earned by James during May.

4. The bank collected a \(\$ 2,400\) note receivable for James and charged a \(\$ 30\) collection fee. Both items appear on the bank statement.

5. Bank service charges in addition to the collection fee, not yet recorded, were \(\$ 65\).

6. Included with the returned checks is a memo indicating that L. Ryder's check for \(\$ 686\) had been returned NSF. Ryder, a customer, had sent the check to pay an account of \(\$ 700\) less a \(2 \%\) discount.

7. James Company incorrectly recorded the payment of an account payable as \(\$ 360\); the check was for \(\$ 630\).

Required

a. Prepare a bank reconciliation for James Company at May 31.

b. Prepare the journal entry (or entries) necessary to bring the Cash in Bank account into agreement with the reconciled cash balance on the bank reconciliation.