ABC Company decides to use bonds as a method of debt financing. They issue 4% bonds on January 1, 2023 with a face amount of $750,000 and a maturity date of December 31, 2027. The bonds pay interest annually on December 31. The market rate of interest is 5%.

Prepare a schedule showing bond amortization using the effective interest method. In addition, what should ABC record (i.e. journal entry) related to these bonds during fiscal year ending December 31, 2023?