An Islamic bank has an Istisna’a agreement to construct a football stadium within a period of four years. The Istisna’a revenue is USD 200 million, and the estimated profit in the contract is USD 80 million. It is agreed in the contract that the bank will bill the client based on the stage of completion determined by its expert.

At the end of the first year, the bank incurred a total cost of USD 40 million. The expert concluded in his report that 30% of the work is completed.

What would be the journal entry to record Istisna’a receivable?

a. Debit Istisna’a receivable by USD 60,000,000 Credit Istisna’a billing by USD 60,000,000

b. Debit Istisna’a receivable by USD 80,000,000 Credit Istisna’a billing by USD 80,000,000

c. Debit Istisna’a WIP by USD 40,000,000 Credit Istisna’a receivable by USD 40,000,000

d. Debit Istisna’a WIP by USD 120,000,000 Credit cash by USD 120,000,000