Answer:
A. Prepare a bank reconciliation at July 31.
Crane Video Company
Bank Reconciliation
July 31
Cash balance per bank statement $7,263
Add: Deposits in transit 1300
8,563
Less: Outstanding checks 591
Adjusted cash balance per bank $7,972
Cash balance per books $7,284
Add: Collection of N/R ($700 plus
accrued interest $36 less collection
fee $20) 716
8,000
Less: Bank service charge 28
Adjusted cash balance per books $7,972
B. Journalize the adjusting entries at July 31 on the books of Crane Video Company.
The adjusting entry would be,
Date Account Title Debit Credit
Jul 31 Cash 716
Miscellaneous Expense 20
Notes Receivable 700
Interest Revenue 36
(to record Collection of N/R ($700 plus accrued interest $36 less collection fee $20)
31 Miscellaneous Expense 28
Cash 28
(to record bank service charge)
