[Semiannual]

Common Stock, $5 par, 40,000 shares issued and outstanding----$200,000
Contributed capital in excess of par value-----------------------------160,000
Retained earnings--------------------------------------------------------300,000

May 1, 2003, B.O.D. declared 15% stock dividend, to be issued on 6/1/03. Market value of the stock on 5/1/03 is $9 per share.

June 1, 2003, dividend was distributed, with 1/3 of the shares issued in the form of 40,000 fractional-share stock warrants.

December 1, 2003, company honored 28,000 of the fractional share warrants by issuing the requisite number of shares. The remaining stock warrants were still outstanding at the end of 2003.

so far I have:

5/1/03
DR Retained earnings----------------------------54,000
CR Common stock dividend distributed--------30,000
CR Additional paid in capital---------------------24,000

I have no idea what it means by 1/3 of the shares issued in the form of 40,000 fractional-share stock warrants. Does it mean for 1/3 of 30,000 is 40,000 stock warrants?

[Semiannual]

all right, I tried my best to complete it:

5/1/03
DR Retained Earnings-----$54,000
CR Common stock dividend distributed-----$30,000
CR Additional paid in capital-----$24,000

6/1/03
DR Common stock dividend distributed-----$30,000
CR Common stock-----$20,000
CR Warrants outstanding-----$10,000

12/1/03
DR Warrants outstanding-----$12,600
CR Common stock-----$7,000
CR Additional paid in capital-----$5,600

This is assuming, the question is saying that 1/3 of the shares is equal to 40,000 warrants (6000 stock dividend/3 = 2000; 40,000/2000 = 20 warrants per share).

Can anyone confirm if I am correct?