The correct option is D Evaporation and condensation
Evaporation will take place in the distillation flask and condensation will take place in the Liebig condenser. On heating, the temperature of liquid reaches its boiling point and liquid start boiling in distilling flask. This vapour of a liquid reaches Liebig condenser which is coated with jacket and water flows make its temperature low. So when vapour passed through this condenser, it starts condensing.