A company has a share capital consisting of 100 000 shares having a par value of $1

Question:

A company has a share capital consisting of 100 000 shares having a of $1 per share and issued at a premium of $1 per share, and 50 000 shares issued at $2 par and $1 premium. Discuss the effects on the accounts if:
(a) The company buys back 20 000 shares at $4 per share
(b) The company buys back 20 000 shares at $2.50 share
Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...