This was explained as the 5% deposit placed with the Treasurer of the United States for the purpose of redeeming circulating notes which are shipped to him from time to time. The entries in this account are simple. Suppose that $10,000 was sent to the Treasurer for redemption purposes. The general ledger entries to cover such a remittance are as follows:

As illustrations of general ledger accounts have been given in previous transactions, it is felt that there is no need for their repetition here. When notes are redeemed by the Treasurer the 5% fund is, of course, reduced until the bank makes another remittance to cover the amount of the redemption. Suppose that $2,000 of the bank's notes are redeemed by the Treasurer and destroyed. Upon receipt of information to the above effect and that the Treasurer had reduced the bank's balance accordingly, the general ledger entries would be: