willie Winn Track Shoes acquired a machine from Betty Will Corporation. Betty Will completed construction of the machine on January 1, 2021. In payment for the $12 million machine, Willie Winn issued a 5-year installment note to be paid in five equal payments at the end of each year. The payments include interest at the rate of 10%. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1). (Use appropriate factor(s) from the tables provided.)

Required:

1. Prepare the journal entry for Willie Winn's purchase of the machine on January 1, 2021.

2. Prepare the journal entry for the first installment payment on December 31, 2021.