Example two: The accounting records of Xyz shows the following accounts as of January 1, 2012. Prepaid rent 40,000, Supplies, 6,000 Prepaid insurance, 2,000 Equipment .80, 000, Building 70, 000 A/P .12, 000 N/P. 9,000.Assume that the company wants to introduce a new product with the required capital of birr 360,000. The company applied for credit at Addis international bank Share Company in order to finance the required capital. The bank accepted application and agreed with 12% interest semiannually with equal installment semi-annually for five years. The bank charged birr 2500 for facilitating the loan. The company estimates a profit of Br 90,000.Show Answer
