Penshurst Ltds balance sheet, before a share dividend, is as follows Peru ltd Balance Sheet as at 30 June 2016 ASSETS Cash at bank Non current assets $ 20000 150000 EQUITY Share capital General reserve Retained earnings $100000 40000 30000 $170000 $170000 The company immediately declared a share di...

Penshurst Ltds balance sheet, before a share dividend, is as follows: Peru ltd Balance Sheet as at

Question:

Penshurst Ltd’s balance sheet, before a share dividend, is as follows:

Peru ltd Balance Sheet as at 30 June 2016
ASSETS Cash at bank Non-current assets	$ 20000 150000	EQUITY Share capital General reserve Retained earnings	$100000 40000 30000
	$170000		$170000

The company immediately declared a share dividend from the general reserve on the basis of

1 bonus share for every 5 shares held. All shares were issued at $1.

Required

Prepare any journal entries necessary to record the payment of this share dividend.

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...

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