A Water Enterprise Fund (EF) Issues $4 Million of 5

Multiple Choice

A Water Enterprise Fund (EF) issues $4 million of 5% revenue bonds on October 1, 2018. The EF will make its first payment of interest on March 31, 2019, together with a principal payment of $200,000. What amount, if any, should the EF report in its fund statement of revenues, expenses, and changes in net position for the year ended December 31, 2018?

A) Zero
B) Interest expense of $100,000
C) Interest expense of $50,000 and principal expense of $100,000
D) Interest expense of $50,000