How should an interest adjustment be shown in the reconciliation of the balance sheet of governmental funds to the statement of net position for

the year?

a. A decrease of $30,000.

b. A decrease of $25,000.

c. A decrease of $5,000.

d. Not shown in this reconciliation schedule.

At the beginning of the year, the City of Vero Beach sold bonds in its capital projects fund. The 6 percent, $500,000 par bonds were sold for 102. The effective

interest rate was 5 percent.