Final answer:
The recognition of tax-supported bonds sold for the construction of a new city jail would be in the Capital Projects Fund, which is used for major capital facilities. So, the correct answer is option b.
Step-by-step explanation:
The sale of tax-supported bonds at par for the construction of a new city jail would require recognition in the Capital projects fund. The Capital projects fund is used to account for financial resources to be used for the acquisition or construction of major capital facilities, other than those financed by proprietary funds or for assets that will be used in operations.
Bonds sold for capital improvements, such as building a new city jail, would be tracked within this fund, which is part of the governmental funds.