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What are the requirements for a company to pay a dividend

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Reference no: EM133001656

On 1 January, Kappa Ltd's share capital was 65000 issues ordinary shared ($650 000) and retained earnings of $400 000. During the year the following transactions occurred:

1 June - Issued 5000 additional ordinary shared for $10 per share.
20 June - Declared cash dividend of $1.20 per share to ordinary shareholders.

Required:

Problem a) Prepare the journal entries to record the above transactions.

Problem b) What are the requirements for a company to pay a dividend?

Reference no: EM133001656

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