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El Gato Painting Company maintains a checking account atAmerican Bank. Bank statements are prepared at the end of eachmonth. The November 30, 2018, reconciliation of the bank balance isas follows:Balance perbank, November 30$3,391Add: Depositsoutstanding1,360Less: Checksoutstanding#363$139#365217#38072#381102#382250(780)Adjusted balanceper bank, November 30$3,971The company’s general ledger checking account showed the followingfor December:Balance,December 1$3,971Receipts44,250Disbursements(43,453)Balance,December 31$4,768The December bank statement contained the followinginformation: Balance, December 1$3,391 Deposits44,600 Checks processed(43,518) Service charges(38) NSFchecks(600) Balance, December 31$3,835The checks that were processed by the bank in December include allof the outstanding checks at the end of November except for check#365. In addition, there are some December checks that had not beenprocessed by the bank by the end of the month. Also, you discoverthat check #411 for $540 was correctly recorded by the bank but wasincorrectly recorded on the books as a $450 disbursement foradvertising expense. Included in the bank’s deposits is a $2,900deposit incorrectly credited to the company’s account. The depositshould have been posted to the credit of the Los Gatos Company. TheNSF checks have not been redeposited and the company will seekpayment from the customers involved.Required:1. Prepare a bank reconciliation for the El Gatochecking account at December 31, 2018.2. Prepare any necessary adjusting journal entriesindicated.