A City Sells $5 Million of 6% Ten-Year General Obligation

A city sells $5 million of 6% ten-year general obligation bonds on April 1,2013.The first installment of debt principal ($250,000) is due to be paid on September 30,2013.What entry should the city make on September 30,2013 in the Debt Service Fund regarding the bond principal?

A) It should recognize a $250,000 liability for Matured bonds payable.
B) It should reduce the $5 million long-term liability by $250,000.
C) It should do nothing in the Debt Service Fund,but it should reduce Bonds payable by $500,000 in the Capital Projects Fund
D) It should make no entry anywhere until the principal is actually paid.