After preparing Reitmeier Corp.'s bank reconciliation in Short Exercise S4-5, make the company's journal entries for transactions that arise from the bank reconciliation. Include an explanation with each entry.
In Short Exercise S4-5
The Cash account of Reitmeier Corp. reported a balance of $2,500 at August 31. Included were outstanding checks totaling $900 and an August 31 deposit of $500 that did not appear on the bank statement. The bank statement, which came from Synergy Bank, listed an August 31 balance of $3,405. Included in the bank balance was an August 30 collection of $550 on account from a customer who pays the bank directly. The bank statement also shows a $20 service charge, $10 of interest revenue that Reitmeier earned on its bank balance, and an NSF check for $35.