CCB Bank Berhad is one of the largest financial holding company in the country. It commencedoperation on 1 April 2000 as a full-fledged commercial bank. CCB Bank provides a suite offinancial products and services that is catered to both retail and corporate customers. The targetbusiness segments are categorised under key business units such as Corporate Banking,Community Banking, Enterprise Banking, and Treasury.On 1 January 2019, CCB Bank enters into hire-purchase contract with a customer for financing amotor vehicle. The customer purchases the motor vehicle from a car manufacturer at a price ofRM200,000 paid in cash by the bank. The cost of the motor vehicle is RM120,000.For this contract, CCB Bank quotes a flat interest rate of 2.5% per year based on the marketprice of the motor vehicle. The arrangement with the customer requires an upfront payment ofRM44,000 followed by four annual instalments of RM44,000 at the end of each year. Thefinancial year end is 31 December. The Bank will release the charge on the title upon payment ofthe last instalment.Required:Using excel, explain step by step on how you perform each questions below.a)What is the total finance charge and the effective interest rate? (Until two decimal points)Prepare the lease receivable schedule.b)c)Prepare the journal entry of the lessor as follows:1.at the date of sale of the motor vehicleii.to recognize the receivable on hire-purchaseiii.to record upfront lease payment from customeriv.to recognize interest income at effective interest rate

Hire-purchase or leasing is an arrangement whereby the buyer purchases the asset by making an…

Required: Using excel, explain step by step on how you perform each questions below. a) What is the total finance charge and the effective interest rate? (Until two decimal points) Prepare the lease receivable schedule. b) c) Prepare the journal entry of the lessor as follows: i. at the date of sale of the motor vehicle ii. iii. to recognize the receivable on hire-purchase to record upfront lease payment from customer to recognize interest income at effective interest rate iv.

Required: Using excel, explain step by step on how you perform each questions below. a) What is the total finance charge and the effective interest rate? (Until two decimal points) Prepare the lease receivable schedule. b) c) Prepare the journal entry of the lessor as follows: i. at the date of sale of the motor vehicle ii. iii. to recognize the receivable on hire-purchase to record upfront lease payment from customer to recognize interest income at effective interest rate iv.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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