At the beginning of the year, Lambert Motors issued the three notes described below. Interest is paid at year-end.

1. The company issued a two-year, 10%, $640,000 note in exchange for a tract of land. The current market rate of interest is 10%.
2. Lambert acquired some office equipment with a fair value of $114,545 by issuing a one-year, $120,000 note. The stated interest on the note is 5%. The current market rate of interest is 10%.
3. The company purchased a building by issuing a two-year installment note. The note is to be repaid in equal installments of $1 million per year beginning one year hence. The current market rate of interest is 10%.

Required:

Prepare the journal entries to record each of the three transactions and the interest expense at the end of the first year for each.