Eastern Turf purchased equipment on January 2, 2021. They issued a $750,000, eight-year, non-interest bearing note to Pro Green for the new equipment when the market rate of interest for similar transactions was 6%. The company will pay of the note in eight $93,750 installments that are due at the end of each year over the life of the note.

Required:

a) Prepare an effective interest amortization table for the note for the eight-year period.

b) Prepare the entries for the purchase.

c) Prepare the entry for at the end of the first and second year to record the payment