Question Four On 20th June 2019, Bahrain Islamic Bank brought 10 Toyota cars from Japan manufacturer at a cost 10,000 each. The cost of freight from Japan to Bahrain was 20,000 and the cost of transport to Bank's warehouse 3,000 with additional cost registration 2,000 for the car. Bahrain Islamic Bank will lease the cars to their customers based on various of terms and condition. At the end of year, due to newer comparable models of cars coming from Honda, the value of the cars reduced from its original cost around 20%. During the year, by using operational ijarah contract Bahrain Islamic Bank managed to lease all its car for two year with monthly rental 500 per car to Ithmaar Bank starting from 1st July 2019 and Ithmaar Bank need to payable yearly in advance. During the year, it received to payments on account, and 31st December 2019 as the second payment. The legal costs of the Ijarah around 5,000 which Bahrain Islamic Bank and the customer agreed to share equally. The Bank considered the legal costs immaterial. Based on the agreement of ijarah, Bahrain Islamic Bank will be responsible insurance premiums on the car such as theft, fire and collision damage. Amount 200 per unit per year. Meanwhile, the customer was responsible for 3rd party damage insurance such as regular maintenance and fuel. The bank was paid the whole year of insurance premium on 1st July 2019. On 1st October, the manufacturer recalled the car for some major repairs to be undertaken on Toyota cars. Bahrain Islamic Bank informed the customer to send all the cars for repairing to the manufacturer. On 31st October, the cars were handed back to the customer. Therefore, Bahrain Islamic Bank depreciates its car vehicle on a straight-line basis over five years with nil residual value and its financial year end is on 31st December. Assets held for less than 2 month are not deprecated for the month. Required: (35 marks) a. Prepare the necessary journal entries in the books of Bahrain Islamic Bank for ijarah contract based on FAS No.8 b. Prepare an extract of the balance sheet and income statement of Bahrain Islamic Bank on 31st December 2019 related to the above transaction c. Give the comment on the profitability of the ijarah contract based on transaction above for Bahrain Islamic Bank