Part I Bank purchased a machine from the seller RM200,000 by cash and the bank leased to Mahmood the machine for 5 years using Ijarah Muntahia Bittamleek contract. Mahmood paid RM50,000 per year as Ijarah payment, At the end of year 5, the bank agreed to give the machine as a gift to Mahmood, thereby enabling the transfer of the ownership of the property to Mahmood. Required: Prepare journal entries to record the following transaction: At the inception of a machine (at the time of contract). When the installment is received in 1st year. Transfer of ownership at the end of year 5.
Question 2.
Part I
Bank purchased a machine from the seller RM200,000 by cash and the bank leased to Mahmood the machine for 5 years using Ijarah Muntahia Bittamleek contract. Mahmood paid RM50,000 per year as Ijarah payment, At the end of year 5, the bank agreed to give the machine as a gift to Mahmood, thereby enabling the transfer of the ownership of the property to Mahmood.
Required:
Prepare
- At the inception of a machine (at the time of contract).
- When the installment is received in 1st year.
- Transfer of ownership at the end of year 5.
Part II.
The bank and client executed a Murabahah contract at an agreed price of RM240,000 (RM200,000 cost and RM40,000 profit for a machine. The bank would receive payment by installment of RM48,000 per year for 5 years.
Required:
Prepare journal entries to record the following transaction:
- At the inception of a machine (at the time of contract).
- When the installment is received in 1st year.
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