The City of Twin Falls issued $5 million in special assessment bonds to finance major reconstruction of the turbines and facilities used in generating electricity that is sold to the citizens in the surrounding area. The electric power distribution activities are accounted for in an enterprise fund, which will service the debt. If the city is legally obligated for the debt, the appropriate entry in the city's Electric Enterprise Fund to record this event is
A) Debit Plant assets; Credit Bonds payable.
B) Debit Plant assets; Credit Contributed capital.
C) Debit Plant assets; Credit Contributed revenue.
D) No entry should be made in the Electric Enterprise Fund.
Correct Answer:
Verified
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