Harrison Company maintains a checking account at the First National City Bank. The bank provides a bank statement along with canceled checks on the last day of each month. The July 2018 bank statement included the following information:
Balance, July 1, 2018 ................................................ $ 55,678
Deposits ................................................................ 179,500
Checks processed ..................................................... (192,610)
Service charges ........................................................ (30)
NSF checks ............................................................. (1,200)
Monthly loan payment deducted directly by
bank from account (includes $320 in interest).................... (3,320)
Balance, July 31, 2018 ............................................... $ 38,018
The company's general ledger account had a balance of $38,918 at the end of July. Deposits outstanding totaled $6,300 and all checks written by the company were processed by the bank except for those totaling $8,420. In addition, a $2,000 July deposit from a credit customer was recorded as a $200 debit to cash and credit to accounts receivable, and a check correctly recorded by the company as a $30 disbursement was incorrectly processed by the bank as a $300 disbursement.
Required:
1. Prepare a bank reconciliation for the month of July.
2. Prepare the necessary journal entries at the end of July to adjust the general ledger cash account.