Last year bell-bottom jeans were fashionable and this year boot cut jeans are are in style. A retail company's inventory has 375 bell-bottom jeans that cost $17 each and could be replaced for $15. The inventory also includes 1,000 boot cut jeans that cost $16 each and could be replaced for $19. Prepare the journal entry that would be used to make the adjustment, and show the effects of the adjustment on the accounting equation. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Record the entry for cost of merchandise sold on account from inventories