Everglades Consultants takes out a loan in the amount of $375,000 on April 1. The terms of the loan include a repayment of principal in eight, equal installments, paid annually from the April 1 date. The annual interest rate on the loan is 5%, recognized on December 31.

1 Compute the interest recognized as of December 31 in year 1.

2 Compute the principal due in year 1.