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:

Multiple Choice

Account Title Debit Credit

Merchandise Inventory $1,370$

Inventory Shrinkage Expense $1,370$

Account Title Debit Credit

Cost of Goods Sold $1,370$

Merchandise Inventory $1,370$

Account Title Debit Credit

Inventory Shrinkage Expense $1,370$

Cost of Goods Sold $1,370$

Account Title Debit Credit

Purchases Discounts $1,370$

Cost of Goods Sold $1,370$

Account Title Debit Credit

Cost of Goods Sold $90,450$

Merchandise Inventory $90,450$