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Learning Objective 6 P7-27A Preparing a bank reconciliation and journal entries The December cash records of Davidson Insurance follow: 1. Adjusted Balance $18,025 Cash Receipts Cash Payments Check No Cash Credit Date Dec. 4 9 Cash Debit $ 4,240 550 $ 810 1416 1417 180 600 1418 630 17 1419 1,900 1,860 1420 1,390 1,490 700 1421 1422 600 Davidson's Cash account shows a balance of $17,450 at December 31. On December 31, Davidson Insurance received the following bank statement: Bank Statement for December $ 14,100 EFT $ 350 4,240 550 600 1,900 1,400 BC 9,040 Beginning Balance Deposits and other Credits: Dec. 1 Dec. 5 Dec. 10 Dec. 15 Dec. 18 Dec. 22 Checks and other Debits: Dec. 8 Dec. 11 (check no. 1416) Dec. 19 Dec. 22 (check no. 1417) Dec. 29 (check no. 1418) Dec. 31 (check no. 1419) Dec. 31 Ending Balance NSF 400 EFT 810 225 180 630 1,930 10 SC (4,185) $ 18,955 Explanations: BC-bank collection; EFT-electronic funds transfer; NSF-nonsufficient funds checks; SC-service charge Additional data for the bank reconciliation follow: a. The EFT credit was a receipt of rent. The EFT debit was an insurance payment. b. The NSF check was received from a customer. c. The $1,400 bank collection was for a note receivable. d. The correct amount of check no. 1419, for rent expense, is $1,930. Davidson's controller mistakenly recorded the check for $1,390

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