25) Meranda Company has a chequing account that earns interest. The May bank statement shows interest earned of $15.67. Prepare the journal entry to record the interest.
26) In the preparation of the bank reconciliation, understanding on which side of the bank reconciliation to record the transaction is important. Populate the bank reconciliation below with the items that follow.
Deposits in transit
Bank errors
Book errors
Outstanding cheques
Electronic fund transfers
Nonsufficient funds cheques
Service charges
Interest revenue
Bank
Book
27) Indicate how each of the activities listed below should be handled when preparing the bank reconciliation. Enter the appropriate word in the space to the left of each item.
Add or
Deduct
or
Activity
Outstanding cheques.
Bank service charge.
Deposit in transit.
Bank returns deposited cheque marked NSF.
Bank collects accounts receivable for depositor electronically.
Bank issued debit memorandum for cheque printing fees.
Bank charged a cheque against the company which should have been charged to another company.
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