On October 31, 2018, Damon Companys general ledger shows a checking account balance of $8,454. The companys cash receipts for the month total $74,700, of which $71,390 has been deposited in the bank. In addition, the company has written checks for $72,524, of which $71,324 has been processed by the bank.

The bank statement reveals an ending balance of $13,114 and includes the following items not yet recorded by Damon: bank service fees of $340, note receivable collected by bank of $6,900, and interest earned on the account balance plus from the note of $1,270. After closer inspection, Damon realizes that the bank incorrectly charged the companys account $1,060 for an automatic withdrawal that should have been charged to another customers account. The bank agrees to the error.

Required:

1. Prepare a bank reconciliation to calculate the correct ending balance of cash on October 31, 2018. (Amounts to be deducted should be indicated with a minus sign.)2. Record the necessary entries to adjust the balance for cash. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

DAMON COMPANY Bank Reconciliation October 31, 2018 Bank's Cash Balance Company's Cash Balance $ 13,114 Per general ledger 3,310Note received (1,200)f Interest earned 1,060 Service fees $8,454 6,900 1,270 (340) Per bank statement Deposits outstanding Checks outstanding Bank error Bank balance per reconciliation 16.264 16,284 Company balance per reconciliation Company balance per 16,284