• Bank Muamalat provides a financing facility based on the Murabaha principle to Barakah Manufacturing to purchase a piece of special equipment for their factory. The financing amounted to $500,000 at a constant rate of return of 10% per year for a period of 5 years. The annual installment payment is $150,000. 
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• You are required to: 
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• i. Present a statement showing the amount of financing, net receivable, and Murabaha income for the whole duration of the contract. 
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• ii. Prepare journal entries for Bank Muamalat for all the years of the contract.

Answer rating: 100% (QA)

SOLUTION i To calculate the amount of financing net receivable and Murabaha income for the whole dur... View the full answer