Harris Corp.sold merchandise to Ichay Company on December 28,Year 1,with shipping terms of F.O.B.destination.The buyer received the merchandise on January 3,Year 2.Which of the following should occur?

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Since the shipping terms are F.O.B. destination, the seller is responsible for shipping costs and revenue recognition should occur when the buyer receives the merchandise. Therefore, the seller should not record sales revenue on December 28, Year 1. The buyer should not pay the transportation costs because the shipping terms are F.O.B. destination. The buyer should not include the merchandise in its inventory at December 31, Year 1, because the merchandise was not in its possession at that time. The buyer should record a liability for the purchase on January 3, Year 2, when it received the merchandise.