Accounting of dividend reinvestment plan
This query is : Resolved
19 February 2013
How to do accounting for units received under dividend reinvestment plan
20 February 2013
Dividend reinvestment plan is something where dividends are invested into additional shares of the company directly.
1.Retained earning
To dividend payable.
( To record the declaration of dividend)
2. Receivable
To share capital
( To reflect the allotment of ordinary shares for which issue price hasn’t been settled)
3. Dividend payable
To dividend receivable
(to record the app of dividend payable against the amount payable for shares)
1.Retained earning
To dividend payable.
( To record the declaration of dividend)
2. Receivable
To share capital
( To reflect the allotment of ordinary shares for which issue price hasn’t been settled)
3. Dividend payable
To dividend receivable
(to record the app of dividend payable against the amount payable for shares)
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