Seasons Limited is a wholly-owned subsidiary of Vivaldi Limited, with both companies preparing their financial statements to 31 December each year. On 23 January 2018, after reviewing the draft financial statements for the year ended 31 December 2017, the directors of Seasons Limited proposed an ordinary dividend of 10 cent per ordinary share in respect of the year ended 31 December 2017.

Requirement Explain how this transaction should be accounted for in the financial statements of Seasons Limited and Vivaldi Limited for the year ended 31 December 2017.