Post the correct journal entries for the bank reconciliation below based on the scenario provided. Scenario:

Question

1. The August 2016 bank statement for Lane Enterprises shows an ending balance of $5,250. Before Lane Enterprises received the bank statement, the bank called to inform the company the ending balance would be overstated by $200 due to a computer glitch. On August 31, the company received $270 in cash which they deposited. Also, the company has $920 in outstanding checks.
2. 
   
3. Lane Enterprises had a cash account balance of $4,875. The company noticed some bank information was not added to its accounting records. On its bank statement, there was a service charge for $260 and an NSF check fee for $150. The statement also shows $80 was added to the final bank balance as interest. To save time, the company decided to have its checks printed by the bank; so this service was an additional charge of $145.

Answer 1

Here are the correct journal entries for the bank reconciliation scenario:

1. To record the deposit: Debit: Cash account $270 Credit: Bank account $270
2. To adjust for the bank error: Debit: Bank account $200 Credit: Miscellaneous income account $200
3. To adjust for outstanding checks: Debit: Outstanding checks account $920 Credit: Bank account $920

Overall, the bank reconciliation journal entries would be: Debit: Cash account $270; Outstanding checks account $920; Bank account $200 Credit: Bank account $1,090; Miscellaneous income account $200

After these adjustments, the ending balance in the company's bank account would match the ending balance on the bank statement.

Bank Reconciliation Entries.

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Wyzant

FINANCIAL ACCOUNTING

Aishat S. asked • 10/29/22

Post the correct journal entries for the bank reconciliation below based on the scenario provided. Scenario:

The August 2016 bank statement for Lane Enterprises shows an ending balance of $5,250. Before Lane Enterprises received the bank statement, the bank called to inform the company the ending balance would be overstated by $200 due to a computer glitch. On August 31, the company received $270 in cash which they deposited. Also, the company has $920 in outstanding checks.

2 / 2

Here are the correct journal entries for the bank reconciliation scenario:

To record the deposit:

Debit: Cash account $270

Credit: Bank account $270

To adjust for the bank error:

Debit: Bank account $200

Credit: Miscellaneous income account $200

To adjust for outstanding checks:

Debit: Outstanding checks account $920

Credit: Bank account $920

Overall, the bank reconciliation journal entries would be:

Debit: Cash account $270; Outstanding checks account $920; Bank account $200

Credit: Bank account $1,090; Miscellaneous income account $200

After these adjustments, the ending balance in the company's bank account would match the ending balance on the bank statement.

Now

Here are the journal entries for the bank-related transactions for Lane Enterprises:

To record the service charge:

Debit: Bank fees expense $260

Credit: Cash account $260

To record the NSF check fee:

Debit: Bank fees expense $150

Credit: Cash account $150

To record the interest earned:

Debit: Cash account $80

Credit: Interest income account $80

To record the check printing charge:

Debit: Bank fees expense $145

Credit: Cash account $145

After recording these transactions, the company's cash account balance will be reduced by the total amount of bank fees ($260 + $150 + $145 = $555) and increased by the interest income of $80. The new cash account balance will be $4,400 ($4,875 - $555 + $80).