Right click on the package to create a new Enity Object, of course this will be created on the table.
Browse the table name to select Department table.
Select all the columns of the table to be a part of Entity Object, this is a usual practice when creating entity object.
Entity object should have a primary key, this should be the Department Id column in this case.
You can optionally create the default view object, or you can create the view object later. In this case, we will create view object later. Just create the entity object for now, and therefore simply click on Next.
Now your DepartmentEO has been created.
Repeat the steps for Location, by creating LocationEO based on Location table.
Now, we can create Entity Association.
Select 1 to many, because one Department will have potentially many Employees.
Select DeptId from EmployeeEO and DepartmentEO and click Add.
Use defaults in Step 3 of 5, and click next.
Your Entity Association has been created.