Prepare bank reconciliation and related entries. AP The bank portion of the bank reconciliation for Katsaris Company at August 31, 2017, was as follows:

KATSARIS COMPANYBank Reconciliation August 31, 2017 Cash balance per bank $13,229 Add: Deposits in transit 2,350 15,579 Less: Outstanding cheques #4451 $1,740 #4460 549 #4461 723 #4462 1,840 #4464 620 5,472 Adjusted cash balance per bank $10,107 The unadjusted cash balance per books on September 30, 2017, was $10,228. The September bank statement showed the following: KATSARIS COMPANY Bank Statement September 30, 2017 Cheques and Other Debits Date Number Amount Deposits Amount Aug. 31 $13,229 Sept.1 4460 $ 549 $2,350 15,030 2 4461 723 14,307 5 4465 1,459 1,212 14,060 7 4462 1,840 12,220 8 4466 1,180 2,365 13,405 9 4467 2,268 11,137 15 4468 554 3,145 13,728 16 2,673 16,401 20 1,967 18,368 23 NSF 1,027 3,126 20,467 26 4470 3,040 17,427 27 4474 1,439 1,940 17,928 27 4472 488 1,070 18,510 30 4475 535 17,975 30 SC 45 17,930 Additional information: 1.The deposit of $3,145 on September 15 is an electronic transfer from a customer in payment of its account. The amount includes $65 of interest, which Katsaris Company had not previously accrued. 2.The NSF for $1,027 is for a $1,015 cheque from a customer, Hopper Holdings, in payment of its account, plus a $12 processing fee. 3.SC represents bank service charges for the month. The bank made one error: it recorded cheque #4475 incorrectly. Any other errors were made by Katsaris Company. The cash records per the company's books for September showed the following: Cash Payments Cash Receipts Date Number Amount Date Number Amount Date Amount Sept.1 4465 $1,459 Sept. 23 4474 $ 1,439 Sept.2 $ 1,212 2 4466 1,180 24 4475 553 7 2,365 2 4467 2,268 30 4476 1,280 15 2,763 5 4468 554 Total $15,076 20 1,967 8 4469 600 26 3,126 12 4470 3,400 28 1,940 17 4471 621 30 1,070 20 4472 488 30 754 22 4473 1,234 Total $15,197

Instructions (a) Prepare a bank reconciliation at September 30. (b) Prepare the necessary adjusting entries at September 30. (Note: The correction of any errors in the recording of cheques should be made to Accounts Payable. The correction of any errors in the recording of cash receipts should be made to Accounts Receivable.)

TAKING IT FURTHER The company will prepare entries to record items found in the above bank reconciliation (see part [b] in the instructions). Describe any other follow-up actions required regarding the other reconciling items in Katsaris Company's bank reconciliation.