In $2015,$ Plumeris City ksued $10$ year bonds on behalf of Dragonfly, a nat$-$forprofit orgarization aimed at improving health in the city. In $2022,$ Dragonfly fikes for barikruptcy as a result of a large, unexpected, increase in staffing costs due to the COMD$-19$ pandemic. At what point will Plumeria City recogrize a liability for the debt held by Dragonfly that was part of the conduit debt arrangement.

When Plumeria City has legally assamed the debt of Dragonfly, mast Buely atter the borkruptry proceeding have been complisted

When it is more likely than nat that Pumeria City wil have to pay the debt of Dragorfly.

The liability was already recognioed in the financial statements of the City at the time the debt was issued in $2015.$

Plumeria City wil not ever recogrixe Dragonfly's debt. By definition, candult debt never becomes the liability of the gowernmental entity that issued the debt.