B is corrent because the Debt Service Fund usually handles the repayment of General Long-Term Debt and the payment of interest on General Long-Term Debt. The premiums received on general obligation bonds are usually transferred from the recipient fund to the Debt Service Fund, because the premium represents an adjustment of the interest cost.
A is incorrect because the General Fund is normally not used to account for general obligation bonds.
C is incorrect because general long-term debt would not be paid from internal service funds.
D is incorrect because the Special Revenue Fund is not normally used to account for general obligation bonds.
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