On November 1, 2022, Dayrit Corporation purchased P800,000 face value, 10-year, 8% term bonds dated October 1, 2022 for ...

The bonds are issued by a company in order to fulfill its financial needs. These are classified as long-term liabilities and carry a certain percentage of interest. However, the bonds can also be zero interest are issued without any coupon rate.

Calculation of interest receivable:

$$\begin{gathered} \mathrm{Interest} \mathrm{Receivable}=\mathrm{Face} \mathrm{Value} \mathrm{of} \mathrm{Bonds}\times \mathrm{Coupon} \mathrm{Rate}\times \mathrm{Time} \mathrm{Period} \\ =\mathrm{P}800,000\times 8\%\times \frac{3}{12} \\ =\mathrm{P}16,000 \end{gathered}$$

The interest receivable on December 31, 2022 balance sheet is P16,000.