Salt City Issued $5 Billion of Bonds at Face Value

Salt City issued $5 billion of bonds at face value to fund the reconstruction of the major interstate highways in and around their city.The bond underwriters withheld $2 million for underwriting fees and remitted the balance to the City.Assuming the City maintains its books and records in a manner that facilitates the preparation of fund financial statement, how would the underwriting fee be accounted for in the capital project fund?

A) Reduce Other financing sources $2 million.
B) Reduce Bonds payable $2 million.
C) Increase Expenditures $2 million.
D) It would not be accounted for in the capital project fund.