On October 1, 2016 Harlond Corporation purchased equipment by issuing a 2 year $450,000 non-interest bearing note payable due September 30, 2018. Harlonds effective interest rate is 9% and the company has a December 31 fiscal year-end. Prepare the journal entries to record the following:

1. Purchase of the equipment

2. Interest at December 31, 2016, Harlond uses the effective interest method.

3. Provide a schedule of the amount of interest paid and interest expensed during 2016 and 2017.