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