Question

Imran Islamic Bank Berhad entered into an Ijarah contract with Syazwan Berhad to lease a helicopter for a period of 3 years. The bank purchased the helicopter from Synergy Fly Berhad on the 1 January 2017 for RM225,000. The bank also incurred legal fees of RM6,000 relating to the Ijarah contract, which the bank considered to be material. The monthly rental was RM90,000, paid at the end of every year. The estimated useful life of the helicopter is 3 years with the estimated residual value at the end of useful life of RM15,000. (Hint: use the expected useful life as a basis to calculate depreciation). Every year, the bank paid takaful expenses of RM5,000. However, in the year 2018, Syazwan Berhad has to incur RM25,000 to repair the helicopter after getting the consent from the bank.

Required: a. Prepare journal entries to record the above Ijarah contract in the books of Imran Islamic Bank Berhad for the years 2017, 2018 and 2019, assuming the lease was treated as Ijarah Muntahia Bitamleek through sale for a token consideration (agreed to be equivalent to 50% of the estimated residual value at the end of useful life). b. How the recording will be different if the above contract is Al Ijarah Thumma Al- Bai (AITAB). Support your answer with some journal entries for the first year of the contract.

^{(Please answer completely)}