Sports International purchased equipment on January 2, 2022. They issued a $500,000, five-year, non-interest-bearing note to Valley 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.

Required:

1. Prepare an effective interest amortization table for the note for the five-year period.
2. Prepare the entries for the purchase.
3. Prepare the entry for at the end of the first year to record the payment.