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|
|(Shrares per Dollar)|