Which of the following is the correct entry on receipt of instalments of year 1, including recognition
Question:
Which of the following is the correct entry on receipt of instalments of year 1, including recognition of profit?
Jordan Islamic Bank gave murabaha financing to Ahmad to purchase a house that cost the bank 200,000 dinars over a 10-year period. The markup was a constant rate of return of 10% per annum. The instalments are to be paid equally over the 10 years. The bank recognises profit equally over the period. Ahmad paid the instalments regularly for the first 4 years and at the end of the fifth year he redeemed the financing. Jordan Islamic Bank agreed to give Ahmad 80% of the unearned deferred profit at the end of year 5, after taking the full profit for year 5.
Step by Step Answer:
Principles Of Islamic Accounting
ISBN: 9781119023296
1st Edition
Authors: Nabil Baydoun, Maliah Sulaiman, Roger J. Willett, Shahul Ibrahim