Retuin to the Max Industries bond in exercise 57-11. Assume that Max Industries issued the bond on July 1, 2020, at a price of 90 . Also assume that Max Industries's accounting year ends on December 31. Journalize the following transactions for Max Industries, including an explanation for each entry:

a. Issuance of the bonds on July \(1,2020\).

b. Accrual of interest expense and amortization of bonds on December 31, 2020. (Use the straight-line amortization method, and round amounts to the nearest dollar.)

c. Payment of the first semi-annual interest amount on January 1,2021

Exercise 7-11

Max Industries Ltd. borrowed money by issuing a \(\$ 10,000\) 6.5\%, 10-year bond. Assume the issue price was 94 on July \(1,2020\).

1. How much cash did Max Industries receive when it issued the bond?

2. How much must Max Industries pay back at maturity? When is the maturity date?

3. How much cash interest will Max Industries pay each six months? Carry the interest amount to the nearest cent.

4. How much interest expense will Max Industries report each six months? Assume the straight-line amortization method, and carry the interest amount to the nearest cent.