A government's Statement of Revenues, Expenditures, and Changes in Fund Balances reflected proceeds of bonds in the amount of $1,000,000. That statement also reflected expenditures for debt service in the amount of $3,000,000, including $2,600,000 for principal payments. Assuming no other changes, the effect, when moving from the change in fund balances in the governmental funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the change in Net Position for governmental activities in the Statement of Activities would be a:

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Bond proceeds of $1,000,000 would be a decrease and principle payments would be an increase $2,600,000 resulting in a net increase of $1,600,000

A Government's Statement of Revenues, Expenditures, and Changes in Fund