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- Dec 8, 2021
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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 | ||||||||
| #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 | ||||||||