A State Issues Long-Term Debt to Finance a Major Construction

A state issues long-term debt to finance a major construction project.The first installment of debt service requires payment of principal of $75,000 and interest of $100,000.Which of the following statements is true on the day that payment for principal and interest is legally due?

A) expenditures of $175,000 should be recognized in the debt service fund.
B) expenditures of $75,000 should be recognized in the capital projects fund and expenditures of $100,000 should be recognized in the debt service fund.
C) expenditures of $100,000 should be recognized in the debt service fund and bonds payable should be reduced by $75,000 in the debt service fund.
D) expenditures of $175,000 should be recognized in the debt service fund and bonds payable should be reduced by $75,000 in the capital projects fund.

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