At the beginning of the year, Lambert Motors issued the three notes described below. Interest is paid at year-end. I . The company issued a two-year, 12%, $600,000 note in exchange for a tract of land. The current market rate of interest is 12%. 2. Lambert acquired some office equipment with a fair value of $94,643 by issuing a one-year, $ I 00,000 note. The stated interest on the note is 6%. 3. The company purchased a building by issuing a three-year installment note. The note is to be repaid i n equal installments of $ I million per year beginning one year hence. The current market rate of interest is 12%.

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.