Final answer:
The journal entry for inventory write-down includes a debit to the inventory account and a credit to the cost of goods sold account according to the lower of cost or market rule.
Step-by-step explanation:
The journal entry to recognize the write-down of inventory to comply with the lower of cost or market rule includes a debit to the inventory account and a credit to the cost of goods sold account. This accounting practice ensures that the inventory is reported at the lower value between the original cost and the current market value. Such a write-down reflects potential losses from unsellable inventory or market price declines. When market conditions or inventory usability reduces the sale value of inventory below its cost, a write-down is necessary to align the inventory's book value with its market value or net realizable value.