On January $1,2021,$ Surreal Manufacturing issued $690$ bonds, each with a face value of $$1,000,$ a stated interest rate of $3$ percent paid annually on December $31,$ and a maturity date of December $31,2023.$ On the issue date, the market interest rate was $4$ percent, so the total proceeds from the bond issue were $$670,855.$ Surreal uses the effective$-$interest bond amortization method and adjusts for any rounding errors when recording interest in the final year.

Required:

Prepare a bond amortization schedule.

$2-5.$ Prepare the journal entries to record the bond issue, the interest payments on December $31,2021$ and $2022,$ the interest and face value payment on December $31,2023$ and the bond retirement. Assume the bonds are retired on January $1,2023,$ at a price of $101.$