Requirement-(a Lance Company Bank Reconciliation July 31 $7,328 $2,700 $10,028 $686 $9,342 Cash balance according to bank statement Add: Deposits in transit, not recorded by bank Less: Outstanding Checks Adjusted balance Cash balance according to company's records Add: Accounts Receivable collected thru EFT $7,364 $2,016 $9,380 $38 $9,342 Less: Bank Service Charges not recorded Adjusted balance Requirement-(b) Date General Journal Debit $2,016 Credit July 31 Cash $2,016 Accounts Receivable To record the collection through E July 31 Miscellaneous Expense $38 $38 Cash To record bank service charges NOTE Adjusting entries in company's books are required to be passed only for those transactions which would affect company records' balance. In other words, transactions which would affect bank records shall not be recorded in company's books of accounts. So, outstanding checks and deposits in transit are not recorded in adjusting entries