Determine share price

Business owner	Number of shares	Price per share	Total investment
John	100	$10	$ 1,000
Mary	100	$10	$ 1,000
Jack	25	$10	$   250
Additional paid in capital from Jack	25	$10	$ 1,625
Total	225		$ 3,875

The $1,625 from Jack is called the additional paid in capital or the older term of capital surplus. This item appears as a separate item in the equity section of the balance sheet.

Many people find it easier to just change the price of stock but other business owners prefer to use the concept of par value and have additional paid in capital item on their balance sheets and corporate records. In accounting, whichever way makes little difference

Par value stock

If a stockholder purchases stock from the corporation for less than par value, that stockholder would be personally liable to creditors for the shortage between the par value and what he or she paid.

Example of buying shares at discount and creditors

If the par value of stock of a corporation is $10 and one investor of the corporation pays $600 for 100 shares of the corporation $10 par stock and the corporation became insolvent. The creditors could demand that the investor pay the other $400 to the corporation's treasury.