On August 31, 2019, the balance in the checkbook and the Cash account of the Dry Creek Bed and Breakfast was $12,362. The balance shown on the bank statement on the same date was $13,242.

Notes

The firms records indicate that a $1,540 deposit dated August 30 and a $710 deposit dated August 31 do not appear on the bank statement.

A service charge of $8 and a debit memorandum of $365 covering an NSF check have not yet been entered in the firm's records. (The check was issued by Art Corts, a credit customer.)

The following checks were issued but have not yet been paid by the bank:

Check 712,$119 Check 713,$134 Check 716,$238 Check 736 ,$586 Check 739,$87 Check 741,$129

A credit memorandum shows that the bank collected a $2,129 note receivable and interest of $72 for the firm. These amounts have not yet been entered in the firm's records.

Required:

Make a bank reconciliation statement for the firm as of August 31.

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?