Reference no: EM132490115

Your review of the December 31, 20X7, accounting records of Let's Go Crazy Inc. reveals the following balances: 

book balance: $1,388,301

bank balance: $1,385,366

A $21,591 deposit made by the company on December 31 is not credited to the company's bank account. The deposit included two payments on accounts receivable from customers and one payment on the principal of a note receivable, for which the accounts receivable and note receivable have already been credited.

The breakdown of this deposit is as follows:

ABC Co. for $10,500

XYZ Inc. for $6,500 o $4,591 payment from Wong Holdings

The December 24, 20X7, deposit for $7,200 was recorded by the bank as $2,700.The monthly property and liability insurance premium payment to Big Insurance Company was deducted from the bank on December 28, 20X7, for $1,654.

• The bank charged bank fees of $65 for December 20X7.
• The bank credited Let's Go Crazy's bank account on December 31, 20X7, for $75 of interest earned during the month.
• On December 30, 20X7, JKL Co. paid its $24,800 outstanding account receivable in full by way of an electronic transfer of funds from JKL's bank directly to Let's Go Crazy's bank account.

Required:

Question a) Prepare Let's Go Crazy's bank reconciliation as at December 31, 20X7.

Question b) Prepare any journal entries required from the bank reconciliation. Ensure that your journal entry(ies) includes an explanation as to the reason for the adjustment on the bank reconciliation.