Torcello Ltd issued 500 000 ordinary shares for \($8.20\) and 100 000 8% preference shares for \($6,\) all shares being fully paid. At the annual general meeting on 30 September 2025, a dividend was declared for a total cash payout of \($120\) 000. Preference shares are entitled to participate in further dividends once ordinary shares have received 10c per share. Assume that the dividends are taken out of retained earnings.

Required

(a) Show how the total dividend would be apportioned between ordinary and preference shares.

(b) Prepare journal entries in general journal form to record the dividend payments.