A Water Enterprise Fund (EF)issues $4 Million of 5% Revenue

Multiple Choice

A Water Enterprise Fund (EF) issues $4 million of 5% revenue bonds on October 1,2013.The EF will make its first payment of interest on March 31,2014,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 31,2013?

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