Question 4 On 1 January 2020, Bank MAB enters into a hire purchase contract with a customer, TBC Sdn Bhd for financing a motor vehicle. TBC Sdn Bhd purchases the motor vehicle from a manufacturer (RMD Bh) at a price of RM300,000 paid in cash by the bank. The cost of the motor vehicle is RM180,000. For this contract, Bank MAB quotes a flat interest rate of 3.5% per year based on the market price of the motor vehicle. The arrangement with TBC Sdn Bhd requires an upfront payment of RM60,000 followed by five annual instalments of RM60,000 at the end of each year (31 December). Bank MAB will release the charge on the title upon payment of the last instalment. (Note: The effective interest rate is 7.931%) Required: (a) Prepare journal entries in the books of RMD Bhd to record the sale of the motor vehicle. (4 marks) (b) Prepare a table using a format below to show the finance charge shall be allocated over the five-year financing period. Show all calculation. (7 marks) Year Opening Balance Interest Income Lease Payment Closing Balance (c) Prepare journal entries in the books of Bank MAB to record the transaction incurred in Year 2020. (7 marks)