The Information Below Was Used to Prepare a Bank Reconciliation

Essay

The information below was used to prepare a bank reconciliation for Lorena Company at October 31:
∙ According to the bank statement, the bank balance as of October 31 was $8,765. According to the books, the cash balance as of October 31 is $9,557.
∙ Outstanding checks totaled $1,433.
∙ A customer's check for $999 was returned for NSF.
∙ October's service charge was $100.
∙ The bank collected $1,600 from a customer of Lorena Company in payment of a note receivable, including interest of $100.
∙ A new bookkeeper had errors in posting checks and recording cash receipts:
1. Check #930 for Salaries Expense written for $930, recorded as $430.
2. A cash sale for $2,300 on October 15 was not recorded by the bookkeeper since she was in a hurry to go to lunch. Ignore Cost of Goods Sold.
∙ A deposit was made by the company for $900. This was the correct amount, however, the bank made a mistake and recorded the deposit as $890.
∙ Deposits made at month-end totaled $4,516; these were not shown on the bank statement.
Required:
1. Prepare the bank reconciliation at October 31.
2. Prepare the journal entries at October 31.