The board of directors reduced the par of common shares from $100 to $20. This action increased the number of outstanding shares to 500,000.

I assume you are talking about a stock split, where originally there were 100,000 shares at $100, and now there are 500,000 shares at $20.

If this is the case, an entry is not needed. You would put a footnote in the financial statements to explain the change.

I think perhaps you need to make a memorandum entry:

Debit Common Stock $100 par
Credit Common stock $20 par

In the Balance Sheet the share capital will be reported as:

500,000 Common Stock $20 par... $100,000

The accompanying note to the financial statements will disclose the details of stock split referring to the authorization by the members as well as compliance of the legal formalities.