1) An Enterprise fund made a debt service payment of $75,000 ($45,000 principal, $30,000

interest) The Enterprise Fund will report

A) $0 expenses

B) $30,000 of expense

C) $75,000 of expense

D) A liability reduction of $75,000

2) A city's Enterprise Fund received $3,000,000 cash in the form of a capital grant during the

fiscal year ended June 30, 20X3. The Enterprise Fund incurred and paid construction costs

from that grant in the amount of $1,200,000. What amount should be reported on the

Enterprise Fund Statement of Net Position as net investment in capital assets?

A. $0

B. $1,200,000

C. $1,800,000

D. $3,000,000

Please give explanations for your answers.

For question 1, I am confused between B and D

For question 2, I am confused between B and C