Due to changes in the prevailing interest rates, Washington County has decided to issue new 5 percent bonds and place the proceeds with a trustee in a manner structured to satisfy all the GASB requirements for an in-substance defeasance of an existing 6.5 percent bond issue. The 6.5 percent bonds were originally issued to fund highway projects and the debt is reported in the governmental activities column of the government-wide statement of net position. The old 6.5 percent bonds are still actively traded in the bond market and will be until their maturity. The new 5 percent bonds will be sold to an institutional buyer who may also sell them in the bond market.

Which bonds should be reported on the government-wide statement of net position?

Neither the 6.5 percent nor the 5 percent bonds.

Both the 6.5 percent bonds and the 5 percent bonds.

Only the 6.5 percent bonds.

Only the 5 percent bonds.