On July 1, 2015, AGR borrowed $30,000 from TCF Bank on a one year, 10% note payable. Interest is payable on June 30, 2016, the due date of the note. AGRs accounting year ends December 31, 2015. The journal entry required on the company's books to record the note payable on July 1, 2015 would include a:

A. credit to notes payable for $30,000.

B. credit to notes payable for $33,000.

C. debit to cash for $27,000.

D. debit to interest expense for $3,500.