On October 31, 2021, Damon Companys general ledger shows a checking account balance of $8,451. The companys cash receipts for the month total $74,680, of which $71,385 has been deposited in the bank. In addition, the company has written checks for $72,521, of which $71,306 has been processed by the bank.

The bank statement reveals an ending balance of $13,041 and includes the following items not yet recorded by Damon: bank service fees of $330, note receivable collected by the bank of $6,800, and interest earned on the account balance plus from the note of $1,220. After closer inspection, Damon realizes that the bank incorrectly charged the companys account $1,020 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, 2021. (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.)