USA Stock compensation journal entries. HELP!


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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​
#1Compensation Expense
15,000.00​
Common Stock
15.00​
PIC
14,985.00​
#2Consultant Fee
45.00​
Common Stock
30.00​
PIC
750.00​
#3Consultant Fee
15,000.00​
Common Stock
30.00​
PIC
750.00​
Income
14,220.00​
 
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kirby

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Your pick, #3, has the company recording income for paying a consultant. What is your reasoning?
 
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#2 and #3 are the same. One is net and the other is gross. Consultants normal pay is $15K. Any comments?
 

kirby

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