A city issued $5 million in special assessment bonds to finance capital assets used to generate electricity that is subsequently sold to the citizens in the surrounding area. The citys electric power distribution activities are accounted for in an Enterprise Fund, which will service the debt. If the city is legally obligated for the debt, the appropriate entry in the citys Electric Enterprise Fund to record this event is..

1. Debit Plant assets; Credit Bonds payable.
2. Debit Plant assets; Credit Contributed capital.
3. Debit Plant assets; Credit Contributed revenue.
4. No entry should be made in the Electric Enterprise Fund.