Question

The May bank statement for Rental shows a balance of $6,300​, but the balance per books shows a cash balance of $8,200. Other information​ includes:
1. A check for $220 to pay the electric bill was recorded on the books as $20.
2. Included on the bank statement was a note collected by the bank for $450 plus interest of $30.
3. Checks outstanding totaled $280.
4. Bank service charges were $50.
5. Deposits in transit were $2,410.

Which​ item(s) will require a journal entry to update the balance in the Cash​ account?

Answer 1

The items that will require journal entries to update the balance in the Cash account of the Rental Company are items 1, 2, and 4, as follows:

Adjusting Journal Entries:

Debit Utilities Expense (Electric) $200

Credit Cash $200

Debit Cash $480

Credit Note Receivable $450

Credit Interest $30

Debit Bank service charges $50

Credit Cash $50

Transaction Analysis:

1. Understatement of a check for the electric bill by $200 ($220 - $20)

2. Note Receivable $450 Interest on Note Receivable $30

4. Bank service charges $50

Cash Account Adjustments:

Utilities Expense (Electric) $200 Cash $200

Cash $480 Note Receivable $450 Interest $30

Bank service charges $50 Cash $50

Thus, the items that will require journal entries to update the balance in the Cash account of the Rental Company are items 1, 2, and 4.

Learn more about adjusting the cash book balance at brainly.com/question/6241936

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