Review your results from preparing First on Alert Security Systems’ bank reconciliation in Short Exercise. Journalize the company’s transactions that arise from the bank reconciliation. Include an explanation with each entry.
The Cash account of First on Alert Security Systems reported a balance of $ 2,470 at December 31, 2015. There were outstanding checks totaling $ 700 and a December 31 deposit in transit of $ 100. The bank statement, which came from Park Cities Bank, listed the December 31 balance of $ 3,700. Included in the bank balance was a collection of $ 640 on account from Brendan Ballou, a First on Alert customer who pays the bank directly. The bank statement also shows a $ 30 service charge and $ 20 of interest revenue that First on Alert earned on its bank balance. Prepare First on Alert’s bank reconciliation at December 31.