Murabahah Question 7.4

Bank Muamalat Berhad provides a Bai Bithaman Ajil financing facility to Dodik for the purpose of buying a shop lot. The financing is amounting to RM400,000 at a constant rate of return 10% for a period of 4 years. At the end of the contract, Dodik owes the bank amounting to RM40,000. It is the policy of the bank to charge customers a penalty fee of 4% per month for any outstanding amount due at the end of the contract and the amount collected is disbursed as charity. Dodik pay the penalty fee after 12 month later.

You are required to:

1. Show journal entries for the transactions for the 5 years in the book of Bank Muamalat.
2. Show the extract of the balance sheet and income statements of Bank Muamalat in respect of the above transactions.