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Silver Inc. maintains a checking account with ABC Bank. The following ledger account provides information for the records related to the beginning balance, deposits, and payments with check. The following cash ledger account is obtained from the companys ledger book for the month ending January 31. Cash Account Deposits: Checks written: Jan.1 Balance $4,851.23 Jan.13 Ck.no. 213 $423 Jan. 19 Deposit $5,000 Jan.24 Ck.no. 214 $125 Jan. 27 Deposit $2,400 Jan.26 Ck.no. 215 $200 Jan. 30 Deposit $1,000 Jan.28 Ck.no. 216 $163 Jan. 31 Deposit $800 The bank statement for the month ended January 31, on the other hand, reveals the following: Bank Statement Previous statement balance (Beginning balance) $4,851.23 Deposits and other increses: Jan. 19 $5,000 Jan. 27 $2,400 Jan. 31 $670 INT Total deposits and other increases $8,070 Checks paid and other decreases: Jan. 15 Ck.no.213 $423 Jan. 29 Ck.no.216 $136 Jan. 30 $ 20 DM Total checks paid and other decreases $589 Jan. 31 Balance this statement $12,342.23 Explanation of symbols: INT Interest earned on average bank balance DM Debit memoranda Comparison of the January's bank statement and company records reveal the following additional information: a. Check No. 216 issued in payment for purchase of merchandise inventory is accurately cleared by the bank but erroneously recorded in the companys accounting books as $163. b. The debit memoranda represent EFT payment of electricity bill by the bank on behalf of Silver Inc. In recording the adjusting entries after bank reconciliation at January 31, which of the following is correct?

(5 Points)

a/ Debit: Cash; Credit: Interest revenue and Inventory

b/ Debit: Interest Revenue; Credit: Cash

c/ Debit: Cash; Credit: Electricity Expense

d/ Debit: Inventory and Cash; Credit: Interest Revenue

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