Reforged purchased equipment on January 2, 2019. They issued a $500,000, five-year, non-interest bearing note to C9 Equipment for the new equipment when the market rate of interest for similar transactions was 8%. The company will pay of the note in five $100,000 installments that are due at the end of each year over the life of the note.

Needed:

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

b) Prepare the entries for the purchase.

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