On August 31, 2019, the balance in the checkbook and the Cash account of the Dry Creek Bed and Breakfast was $12,192. The balance shown on the bank statement on the same date was $13,147.

Notes

1. The firms records indicate that a $1,350 deposit dated August 30 and a $691 deposit dated August 31 do not appear on the bank statement.
2. A service charge of $9 and a debit memorandum of $270 covering an NSF check have not yet been entered in the firms 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,	$	100
Check 713,	$	115
Check 716,	$	228
Check 736,	$	567
Check 739,	$	68
Check 741,	$	110

4. A credit memorandum shows that the bank collected a $2,034 note receivable and interest of $53 for the firm. These amounts have not yet been entered in the firms 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: What effect did the journal entries recorded as a result of the bank reconciliation have on the fundamental accounting equation?