The city of Hull has established a separate internal service ( self-insurance) fund to pay claims and judgements of all of Hull's funds. In the current year, payment to the internal servvice fund amounted to $500000, but the actuarially determined amount was $400,000. The payments to the internal service fund should be accounted for by that fund as:

A transfer of interfund revenues of

1) $400,000 $100000

2) 0 0

3) $100,000 $400,000

4) 500,000 0