Shares and dividends a)

Rhubarb Ltd has the following equity on 1 July 20X2:

Share capital

100 000 ordinary shares issued at $1.20, fully paid $120 000

40 000 7% preference shares issued at $1, fully paid 40 000

160 000

General reserve 85 000

Retained earnings 136 000

Total equity $381 000

During the financial year 20X2/X3, the following events which affected equity occurred:

Nov 22 An interim dividend of 4 cents per ordinary share was declared and paid.

Dec 5 A prospectus was issued inviting subscriptions for 28 000 ordinary shares at a subscription price of $1.40 per share, payable 80 cents on application and 60 cents on allotment.

Jan 15 Applications closed, with applications having been received for 28 000 shares. Applicants for 4 000 shares had paid in full on application.

Jan 17 Shares applied for were allotted, with excess application money being applied to allotment.

Feb 19 The balance of the allotment money due was received.

June 20 The directors paid the preference dividend for the year.

June 30 At the end of the financial year Rhubarb Ltd recorded an after tax profit of $123 000.

Required:

What is the amount Rhubarb Ltd should recognise for the Interim dividend?

Prepare general journal entries to record the above transactions. Narrations are not required. Show all your calculations.