P8-5B Zhang Company's bank statement from Nguyen National Bank at August 31, 2017, shows the information below.

Balance, August 1 $11,284

August deposits 47,521

Checks cleared in August 46,475

Balance, August 31 16,856

Bank credit memoranda: Collection of note

receivable plus $105

interest $5,105 Interest earned 41

Bank debit memorandum:

Safety deposit box rent 20

A summary of the Cash account in the ledger for August shows: balance, August 1, $10,959; receipts $50,050; disbursements $47,794; and balance, August 31, $13,215. Analysis reveals that the only reconciling items on the July 31 bank reconciliation were a deposit in transit for $3,200 and outstanding checks of $2,925. The deposit in transit was the first deposit recorded by the bank in August. In addition, you determine that there were two errors involving company checks drawn in August: (1) A check for $340 to a creditor on account that cleared the bank in August was journalized and posted for $430. (2) A salary check to an employee for $275 was recorded by the bank for $277.

Instructions

(a) How do I prepare a bank reconciliation at August 31?

(b) how do I Journalize the adjusting entries to be made by Zhang Company at August 31. Assume

that interest on the note has not been accrued by the company.