The January 31 bank statement of Bed & Bath Accessories has just arrived from First National Bank. To prepare the Bed & Bath bank reconciliation, you gather the following data:

a. The January 31 bank balance is $8,400.82.

b. Bed & Bath's Cash account shows a balance of $7,391.55 on January 31.

c. The following Bed & Bath checks are outstanding at January 31:

Check No. Amount

616..............................$403.00

802.............................. 74.02

806.............................. 36.60

809.............................. 161.38

810.............................. 229.05

811.............................. 48.91

d. The bank statement includes 2 special deposits: $899.14, which is the amount of dividend revenue the bank collected from IBM on behalf of Bed & Bath, and $16.86, the interest revenue Bed & Bath earned on its bank balance during January.

e. The bank statement lists a $6.25 bank service charge.

f. On January 31 the Bed & Bath treasurer deposited $381.14, which will appear on the February bank statement.

g. The bank statement includes a $410.00 deduction for a check drawn by Bonjovi Music Company.

h. The bank statement includes 2 charges for returned checks from customers. One is a nonsufficient funds check in the amount of $67.50 received from a customer. The other is a $195.03 check received from another customer. It was returned by the customer's bank with the imprint "Unauthorized Signature."

i. A few customers pay monthly bills by EFT. The January bank statement lists an EFT deposit for sales revenue of $200.23.

Required

1. Prepare the bank reconciliation for Bed & Bath Accessories at January 31.

2. Journalize the transactions needed to update the Cash account. Include an explanation for each entry