The town of Brittainville has two Enterprise Funds- one forits water and wastewater operations and another for its cabletelevision operation. The Water and Wastewater Enterprise Fundissued $11,000,000 of 6%, 15-year refunding bonds at par during theyear. It also received a $175,000 federal grant to expand water andwastewater lines to economically depressed residentialneighborhoods. The Cable Enterprise Fund made its annual payment of$1,000,000 to the General Fund to subsidize operations. It also wasthe recipient of a Federal Communications Commission unrestrictedgrant of $100,000.
How will the interfund payment be reported on the CableEnterprise Fund's operating statement?
A. Transfer out of $1.000,000.
B. Operating expense of $1,000,000.
C. Nonoperating expense of $1,000,000.
D. Capital contribution of $1,000,000.
E. None of the above- the transaction is not reported on theoperating statement, but as a direct reduction of equity on thestatement of net assets.