5 On November 30, 2016, ABC borrowed $40,000 from American National Bank by issuing an interest-bearing note payable. This loan is to be repaid in three months [on February 28, 201?), along with interest computed at an annual rate of 9%. The entry made on November 30 to record the borrowing was: Dr Cash 40,000 Cr Notes payable 40,000 On February 28, 201? ABC must pay the bank the amount borrowed plus interest. Assume the beginning balance for Notes Payable is correct. Interest through 12.}31116 must be accrued on the $40,000 note. BABC uses a periodic inventory system, and the ending inventory for each year is determined by taking a complete physical inventory at year-end. A physical count was taken on December 31, 2016, and the inventory onhand at that time totaled $'}'0,000, which reects historical cost. Record the adjusting entry for properly recognizing 2016 Cost of Goods Sold. Hint: This was the rst year of operations, so beginning inventory balance is zero. Additionally ABC adheres to GAAP by recording ending inventory at the lower of cost and net realizable value at a total inventory level. A review of inventory data further indicated that the current retail sales value of the ending inventory is $60,000 and estimated costs of completion and shipping is 10% of retail. Be sure to make an additional adjustment, if necessary, to properly value ending inventory using the Loss and Allowance methodology. For Income Statement presentation purposes, be sure to use the Loss Method for acootmting for adjustments of inventory to market value