The bank statement for Corsen’s Fashion Inc. had an ending cash balance of $3,000 on July 31, 2020. On this date, the company’s cash balance in the general ledger was $4,000. After comparing the bank statement with the company records, the following information was determined:

• The bank returned an NSF cheque in the amount of $640 that Corsen’s Fashion Inc. deposited on July 20.
• Direct deposit received from a customer on July 30 in payment of their accounts totalling $3,850. This has not yet been recorded by the company’s bookkeeper.
• On July 30, the bank deposited $20 for interest earned on the account.
• The bank withdrew $40 for bank service charges.
• Deposits in transit on July 31 totalled $4,190.

Required
Reconcile the ledger and bank statement, and create the required journal entries.