Flora County Issues $6 Million of Revenue Bonds to Finance

Flora County issues $6 million of revenue bonds to finance construction of additional physical plant facilities for the county sewer system that is accounted for in an enterprise fund. The bond agreement requires that $0.5 million of the proceeds be invested in U.S. Treasury securities to be used to service the debt if revenues in a particular year are insufficient to do so. When it sells the bonds, the county debits restricted cash and credits revenue bonds payable. What additional entry, if any, is needed?

A) No additional entry is needed at this time.
B) Debit restricted net position $0.5 million; Credit unrestricted net position $0.5 million.
C) Debit unrestricted net position $0.5 million; Credit restricted net position $0.5 million.
D) Debit unrestricted retained earnings $0.5 million; Credit restricted retained earnings $0.5 million.