On January 1, 2017, Surreal Manufacturing issued 660 bonds, each with a face value of $1,000, a stated interest rate of 3.70 percent paid annually on December 31, and a maturity date of December 31, 2019. On the issue date, the market interest rate was 4.00 percent, so the total proceeds from the bond issue were $654,508. Surreal uses the effective-interest bond amortization method. Required: 1. Prepare a bond amortization schedule. (Round your final answers to the nearest whole dollar.)

2. Prepare the journal entry to record the bond issue.