Exercise 5, Scrip Dividends:

On 5/1, Year 6, the board of directors of a corporation declares a scrip dividend of $0.12 per share for 2,000,000 shares outstanding for shareholders of record on 6/15, Year 6, payable on 10/1, Year 6. The interest rate applicable to the scrip dividend is 6%.

5/1/Yr 6

6/15/Yr 6

10/1/Yr 6