A City Receives a Grant from the State to Help $\begin{array}{lll}\text { Cash } & 2,800,000 & \\\quad \text { Advance on construction grant } && 2,800,000 \\\end{array}$

A city receives a grant from the state to help pay for the construction of a new fire station. An eligibility requirement is that the city must incur eligible construction expenditures on the fire station. The state sends the city $2,800,000 prior to the city beginning construction on the fire station. What journal entry should the city make to record the receipt of $2,800,000 from the state in the Capital Projects Fund?
a.
$\begin{array}{lll}\text { Cash } & 2,800,000 & \\\quad \text { Advance on construction grant } && 2,800,000 \\\end{array}$

b.
$\begin{array}{lll}\text { Cash } & 2,800,000 & \\\text { Revenues-construction grant }& & 2,800,000 \\\end{array}$

c.
$\begin{array}{lll}\text { Cash } & 2,800,000\\\text { Construction contracts pavable } & & 2,800,000\end{array}$

d. No entry is necessary because the city has not yet begun construction on the fire station.