Zenith Company's Merchandise Inventory Account at Year-End Has a Balance

Zenith Company's Merchandise Inventory account at year-end has a balance of $91,820,but a physical count reveals that only $90,450 of inventory exists.The adjusting entry to record this $1,370 of inventory shrinkage is:

A) $\begin{array}{|l|r|r|}\hline \text { Merchandise inventory } & 1,370 & \\\hline \text { Inventory shrinkage expense } & & 1,370 \\\hline\end{array}$
B) $\begin{array}{|l|r|r|}\hline \text { Purchases discounts } & 1,370 & \\\hline \text { Cost of goods sold } & & 1,370 \\\hline\end{array}$
C) $\begin{array}{|l|r|r|}\hline \text { Cost of goods sold } & 1,370 & \\\hline \text { Merchandise inventory } & & 1,370 \\\hline\end{array}$
D) $\begin{array}{|l|r|r|}\hline \text { Inventory shrinkage expense } & 1,370 & \\\hline \text { Cost of goods sold } & & 1,370 \\\hline\end{array}$
E) $\begin{array}{|l|r|r|}\hline \text { Cost of goods sold } & 90,450 & \\\hline \text { Merchandise inventory } & & 90,450 \\\hline\end{array}$