During the fiscal year ended December $31,2024,$ the City of Johnstown issued $5\%$ general obligation serial bonds in the amount of $$2,000,000$ at $102($$$2,040,000)$ and used $$1,990,000$ of the proceeds to construct a fire station. The $$40,000$ premium was transferred to a debt service fund. The $$10,000$ left in the capital projects fund at the end of the project was later transferred to the debt service fund. The bonds were dated April $1,2024$ and paid interest on October $1$ and April $1.$ The first of $10$ equal annual principal payments was due on April $1,2025.$

How would the government account for the transfer of the unused bond proceeds?

As an other financing source in the debt service fund and as an other financing use in the capital projects fund.

As a revenue in the debt service fund and as an expenditure in the capital projects fund.

As an other financing source in the capital projects fund and as an other financing use in the debt service fund.

As a special item in both the debt service and capital project funds.