Which of the following would be shown in the operating statement of a proprietary fund?

The correct choice reflects the nature of how proprietary funds operate. Proprietary funds, which include enterprise funds and internal service funds, are designed to operate in a manner similar to private businesses. They account for their revenues and expenses through operating statements that focus on the flow of funds as related to operational activities.

Incurrence of interest is directly related to the operations of a proprietary fund, as it represents the cost of borrowing that is incurred in the process of funding the operations of the business. This cost is treated as an expense on the operating statement since it affects the net income of the fund, thereby influencing the overall financial performance.

On the other hand, the issuance of debt and capital outlay are typically recorded on the statement of cash flows and balance sheets rather than the operating statement. Issuing debt affects the financing section where cash inflows from debt issuance are recognized, but it is not an operating expense. Similarly, capital outlay refers to expenses incurred for acquiring or improving fixed assets and would be recorded on the balance sheet rather than affecting the operational income directly. Debt service principal payments also do not appear on the operating statement as they are considered financing activities related to the repayment of debt rather than operating costs.

Therefore, incurring interest is the key