Sugar City Issued $2 Million of Bonds to Fund the Construction

Sugar City issued $2 million of bonds to fund the construction of a new city office building.The bonds have a stated rate of interest of 5% and were sold at 101.Which of the following entries should be made in the Capital Projects Fund to record this event?

A) Debit Cash $2.02 million; Credit Bonds payable $2 million and Premium on bonds payable $.02 million.
B) Debit Cash $2.02 million; Credit Bonds payable $2 million and Other financing sources $.02 million.
C) Debit Cash $2.02 million; Credit Other financing sources $2.02 million.
D) Debit Cash $2.02 million; Credit Other financing sources $2 million and Revenue $.02 million.