Enter a DRP (Dividend Reinvestment Plan) into the Investment Register via a Cashbook transaction

Enter a DRP (Dividend Reinvestment Plan) into the Investment Register via a Cashbook transaction

BEFORE YOU START MAKE SURE YOU HAVE SETUP YOUR  INVESTMENT REGISTER LINK  IN CHART
DRP (Dividend Reinvestment Plan) enables eligible shareholders to reinvest all or part of any dividend paid on their shares into additional shares, rather than receiving dividends in cash.

For Example: A person owns 310 BHP shares. BHP paid a Final Dividend of  0.88545327  per share on the 25/09/2018 = $274.49.
The reinvestment price was $34.0508. Number of shares allocated for dividend reinvestment is 8 shares.

Note: There is often a small difference between the dividend paid ( $274.49 ) amount and the value of the shares received through the dividend reinvestment plan ( 8 x $34.05 = $272.40 ). In this case the difference is $2.09 . This small amount left over, the company (e.g. BHP Group Limited) will just keep as a credit for you for next time you receive a DRP allocation. 

Step 1. To enter the DRP into Cashbook and the Investment Register:

  • Click on the Cashbook toolbar option.
  • Click on the Add button.
  • Click Yes to the Confirm message: 'Do you want to enter transactions for ".........", in the company file "........"?

Step 2. In the Add Transaction window enter the transaction details

  • Type: Cash Journal
  • Date: e.g. 20/12/2018
  • Reference: CASH JNL (auto-fill)
  • Paid To:  ash Journal (auto-fill)
  • Account: 193 Purchase - Shares
  • Quantity: the number of shares purchased  e.g. 8  
    Note:  This dissection line is red, which indicates that account 460 Shares Purchased is linked to the Investment Register.
  • Using the tab key, tab through to the Note (Optional) and select share name (e.g. BHP Group Limited) from the drop-down list, then click on the [I] button to access the Investment Register.
 

Step 3. In the Add transaction for investment "BHP Group Limited" window: Enter the relevant information:

  • Transaction Type: Dividends re-invested
  • Date: e.g. 20/12/2018
  • Notes: e.g. 2018 Final Dividend
  • No. of units for Dividend: auto-fill 
  • Franked Amount: see dividend/DRP statement
  • Franking Credit: see dividend/DRP statement 
  • Unfranked Amount: see dividend/DRP statement
  • Tax Withheld: see dividend/DRP statement
  • No. of Units Purchased: see dividend/DRP statement 
  • Avg. Price Unit: make sure this matches amount recorded on statement
  • Click on the OK button to save.
 

Step 4. Enter the second dissection of the Cash Journal:

  • Account: 003 Dividends/Share Income
  • Quantity: 310
  • Click on the OK button to save.


CSC Article ID #4305