The singer changed his name to Mikaeel in a ceremony at a friend's Los Angeles home just days before he is due in court.
Jackson, 50, is facing allegations of borrowing $7 million from Arab sheikh Abdulla Al-Khalifa and failing to repay the sum by recording two new albums, writing an autobiography and penning a musical.
The cash-strapped star - who was raised as a Jehovah's Witness - was convinced to turn to Islam by producer Phillip Bubal and songwriter David Wharnsby.
A source told Britain's The Sun newspaper: "They began talking to him about their beliefs and how they thought they had become better people after they converted."
"Michael soon began warming to the idea."
Singer Yousef Islam - formerly known as Cat Stevens before he also converted to the religion - attended the star's declaration of belief, known as the shahada.
Meanwhile, an itemized list of Jackson's debts to the prince has been revealed - including a $5.7 tub of the singer's favorite Haagen-Daaz ice cream.
A source said: "It's the most bizarre list imaginable. Some bills are only for$7.5 - but the sheikh wants every penny back."
Jackson will be forced to attend a London court in person on Monday (November 24, 2008) after previously saying he was too ill to travel.
A source added to Britain's Daily Mirror newspaper: "Michael will be in court and will be holding his head up high."
"He is very hurt and baffled by these claims, but he is hoping his fans will support him."
Jackson claims the money - which includes court costs of more than $1,000,000 for his 2005 child molestation case sent to him before the sheikh had met him - was a "gift."
