In preparing my income statement I was given this piece of additional information:

During 2008, the person recorded dividend payment of $260 000 to a major shareholder for consulting work. A dividend was also declared on Dec 31, 2008 in the amount of $120000.

How will I incorporate this information in the income statement or statement of retained earnings.
Will I put the amount declared in the statement of retained earnings?

If it helps Common shares, 430 000 shares outstanding

This appears to be homework question. Please submit your attempt for guidance.

It is rather strange to find that payment to a shareholder for consultancy is treated as dividend payment. Does not make sense.