First, I read the boys the story on the couch.
Then Micah goes to the school room table and draws a picture from the story. As you can see by this photograph, he takes this way too seriously. He wants his drawings to be perfect.
Then he tells the story back to me and I write it down for him. I don't correct his grammar during this time. I just write as fast as I can. At the very end of our language arts lesson we will get out an Atlas and trace the country that the story took place in. Depending on time and attention level we might even learn a bit more about that country.
While Micah draws his picture, I copy a sentence or maybe two, if they are short, for him to copy when he is done drawing.
Below are some more examples of lessons we have done. I don't do anything more than this, at this age. When he is copying or when we are reading I might point out to him punctuation and what it is there for and other things like this. It is very informal and very natural.