Bisgrove Company has inventory at the end of the year with a historical cost of $50,000 and a net realizable value of $45,000. Bisgrove Company uses a perpetual inventory system and the FIFO inventory cost method. What journal entry should Bisgrove Company record to comply with the LCM rule?

Group of answer choices

No entry necessary.

debit Cost of Goods Sold for $5,000 and credit Inventory for $5,000.

debit Obsolescence Expense for $5,000 and credit Inventory for $5,000.

debit Inventory for $5,000 and credit Cost of Goods Sold for $5,000.