Purchase: If a business sells its products using a par value accounting method, the investment portfolio in the bank is debited by the overall resource valuation of the goods purchased and the balance charged in cash is attributed to a currency portfolio.
Whether the debit share of the journal exceed the credit component, the variance shall be compensated with the additional paid-in equity of the treasury stock and, if a credit element of the journal entry reaches the debit component, the discrepancy shall be owed to the additional paid-in equities of the treasury stock.
Re-issuance: In compliance with par value method, the account balance will be debited to the amount of cash earned as securities are reissued from treasury stock, and the treasuries will be attributed to the resource share value.
Where the amounts earned in respect of cash is higher than that of the total par value of the securities reissued, the disparity shall be added to the additional money paid in by treasury, and the amount obtained shall be less than the total par price of the investment reissued and the discrepancy shall be debited in respect of additional paid in money from treasury stock, except any extra capital paid out by the treasury is paid out of treasury.
Example of Par Value Method
The following payments are for Metro corporate entity:
Provided 2,000 shares of $5 worth of common stock at $20 per share.
Purchased 300 shares at $18 per share.
Purchased back 400 shares at $25 per share.
Reissued 200 units of $30 per unit.
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