5 SCase Study for Ijarah 2Below is the case study for the understanding of suggested Ijarahaccounting: The ijarah rent is received on monthly basis.ExampleAsset PriceMonthly rentalsTenureSecurity DepositDelivery timePurchase date of the assetUseful life of the assetResidual value of the assetCase Study for Ijarah 2DANPass the necessary journal entries on the date of purchase, delivery to the lessee,and for the receipt of the rent income for the first three months. Also pass thejournal entry at the end of the useful life of the asset, considering that the asset issold at 1000 Riyals after its useful life.ANThe HuAmount in Rs./%2000 Riyals60 Riyals1 years1001 month1-1-201612 months100 Riyals

Assets A/c ..........................................Dr. 2000 Riyals To Vendor A/c…

Pass the necessary journal entries on the date of purchase, delivery to the lessee, and for the receipt of the rent income for the first three months. Also pass the journal entry at the end of the useful life of the asset, considering that the asset is sold at 1000 Riyals after its useful life.

Pass the necessary journal entries on the date of purchase, delivery to the lessee, and for the receipt of the rent income for the first three months. Also pass the journal entry at the end of the useful life of the asset, considering that the asset is sold at 1000 Riyals after its useful life.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Market Efficiency

Market efficiency refers to the market's ability to provide investors with all available information about investment options for buying and selling securities. Market efficiency reflects the true value of securities without undervaluing or overvaluing them. When the quality and quantity of information increase, the market becomes more efficient, allowing it to reduce arbitrage and obtain higher market returns from investment. In a well-functioning market, everyone receives all information completely and immediately at no cost. It opens up a plethora of opportunities for investors to access various investment options.

Question

S
Case Study for Ijarah 2
Below is the case study for the understanding of suggested Ijarah
accounting: The ijarah rent is received on monthly basis.
Example
Asset Price
Monthly rentals
Tenure
Security Deposit
Delivery time
Purchase date of the asset
Useful life of the asset
Residual value of the asset
Case Study for Ijarah 2
DAN
Pass the necessary journal entries on the date of purchase, delivery to the lessee,
and for the receipt of the rent income for the first three months. Also pass the
journal entry at the end of the useful life of the asset, considering that the asset is
sold at 1000 Riyals after its useful life.
AN
The Hu
Amount in Rs./%
2000 Riyals
60 Riyals
1 years
100
1 month
1-1-2016
12 months
100 Riyals

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Step 1- Journal entry on date of purchase

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Step 2 Journal entry when assets is leased to lessee

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Step 3 Journal entry for receipt of rent income

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Step 4 Journal entries on sale of assets

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