Salmon County Issued $25 Million of 5% Demand Bonds for Construction

Salmon County issued $25 million of 5% demand bonds for construction of a county maintenance building.The County has no take-out agreement related to the debt.It estimates that 20% of the bonds would be demanded called by the buyers if interest rates increased at least 1%.At year-end rates on comparable debt were 7%.How should these demand bonds be reported in the governmental fund financial statements at year-end?

A) $25 million in the Capital Projects Fund.
B) $5 million in the Capital Projects Fund AND $20 million would be reported in the Schedule of Changes in Long-Term Debt Obligations.
C) $20 million in the Capital Projects Fund AND $5 million would be reported in the Schedule of Changes in Long-Term Obligations.
D) $25 million in the Schedule of Changes in Long-Term Obligations.