On January 1, 2021, Norwood borrows $500,000 cash from a bank by signing a five-year installment note bearing 8% interest. The note requires equal payments of $125,229 each year on December 31.

Complete an amortization table for this installment note.

Prepare the journal entries in which Norwood records the following:

(a) Norwood borrows $500,000 cash by signing a five-year, 8% installment note.

(b) Record the first installment payment on December 31, 2021.

(c) Record the second installment payment on December 31, 2022.