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In the current fiscal year, Smith Company issued purchase orders and contracts of $650,000 that were chargeable against the current year's budgeted appropriations of $7,000,000.

In the current fiscal year, Smith Company issued purchase orders and contracts of $650,000 that were chargeable against the current year's budgeted appropriations of $7,000,000. The journal entry to record the issuance of the purchase orders and contracts should include a:

A. Debit to encumbrances of $650,000

B. Debit to appropriations of $650,000

C. Credit to encumbrances outstanding of $7,000,000

D. Credit to vouchers payable of $650,000

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