Pacheco City Issued $20 Million of Bonds at Par

Pacheco City issued $20 million of bonds at par. The city loaned the proceeds to Sharpe Cheese Processors to expand the size of its facility, which would allow Sharpe to hire additional workers. The loan payments from Sharpe to the city are established to match the principal and interest payments on the bond issue. The bonds are payable exclusively from the loan repayments by Sharpe. The bonds are secured by the additional plant facilities built by Sharpe. Where should the city report the bonds in its annual financial report?

A) In the government-wide financial statements.
B) In the notes to the financial statements.
C) In the proprietary fund financial statements.
D) In any of the above ways.