USA Stock compensation journal entries. HELP!

[AreaCode5551212]

Folks, I have a situation where a startup can no longer afford to pay employees so they are compensating with unrestricted stock. For simplicity, par value is $0.01 and the value of each shares is $0.02. The company currently has a negative Stockholder's Equity. IMO, #3 is the proper way to book the transaction. #2 is probably OK as #3 simply grosses up everything.

			Stock Award in Lieu of Salary
			Salary Per Month		15,000​
			Exchange Rate		10​
			(Shrares per Dollar)
			Shares Received		1,500​
			Shares Awarded
			Par Value	$0.02​
			Price	$0.50​
	#1		Compensation Expense		15,000.00​
				Common Stock			15.00​
				PIC				14,985.00​
	#2		Consultant Fee			45.00​
				Common Stock			30.00​
				PIC				750.00​
	#3		Consultant Fee			15,000.00​
				Common Stock			30.00​
				PIC				750.00​
				Income				14,220.00​

 

[kirby]

Your pick, #3, has the company recording income for paying a consultant. What is your reasoning?

 

[AreaCode5551212]

#2 and #3 are the same. One is net and the other is gross. Consultants normal pay is $15K. Any comments?

 

[kirby]

Never answered my question. So I assume you are OK and we are done.

 

[AreaCode5551212]

#3 is just grossing up. its prob not the correct way.