If the physical count of inventory revealed $128,000 of merchandise on hand and the inventory records reported $135,000, what would be the necessary adjusting entry to record inventory shrinkage? debit Merchandise Inventory, $128,000, credit Cost of Merchandise Sold, $128,000 debit Merchandise Inventory, $7,000; credit Cost of Merchandise Sold, $7,000 debit Cost of Merchandise Sold, $7,000, credin Merchandise Inventory. $7,000 debit Cost of Merchandise Sold, $135,000; credit Merchandise Inventory, $128,000