Cannon Island is a small island situated in the Southwestern Sea, just southwest of Mercay Island. It is easily distinguishable from the large crane that sits at its peak.
On this island that you receive two major gameplay items: the cannon and the salvage arm. Eddo and his assistant, Fuzo, run the shop here that will sell you these items as the game progresses. The cannon is purchased for 50 rupees. The cost of the salvage arm can be dropped from 300 to 200 Rupees if you follow the instructions carefully.
There is a power gem hidden on the island. There is also a big red rupee that can cover the cost of the salvage arm.