I am no expert on the situation nor do I pretend to act like one, but, as a business owner, allow me to give you my personal opinion.

Option 3 is closest to what you want.

Why? Well:

1. You have a $100 AP.
2. You put in "Other Income" with a note like "Vendor discount from XYZ of 100%.
3. Then you put in the AP as Played in full.

This way, you have both the record of everything that was done, and also IRS can see exactly what happened.

Another suggestion would be to ask the [GnuCash](http://www.gnucash.org) maintainers and community directly. You can have a chat with them on their [IRC channel #gnucash](http://wiki.gnucash.org/wiki/IRC), [send them an email](http://wiki.gnucash.org/wiki/Mailing_Lists), maybe find the answer in the [documentation](http://www.gnucash.org/docs.phtml) or [wiki](http://wiki.gnucash.org/wiki/GnuCash).

Popular software apps usually have both support people and a helpful community, so if the above method is in any way inconvenient for you, you can give this one a try.

Hope this helps!

Robert