Sandstone Company Has the Following Stockholders' Equity Section:
Common

Sandstone Company has the following stockholders' equity section:
Common Stock,500,000 shares authorized:
$\begin{array}{ll} 400,000 \text { shares issued and outstanding } & \$ 700,000 \\\text { Additional Paid-in Capital } & 4,900,000 \\\text { Retained Earnings } & 7,300,000 \\\text { Total Stockholders' Equity } & \$ 12,900,000\end{array}$
What is the journal entry to be made by Sandstone Company if the company purchases and retires 15,000 shares of its own common stock when the market price of the stock is $20 per share?

A) $\begin{array} { l l l } \text { Common Stock } & 26,250 & \\\text { Retained Earnings } & 273,750 & \\\text { Cash } & & 300,000 \\\end{array}$

B) $\begin{array}{lccc}\text { Common Stock } & 26,250 & \\\text { Additional Iaid-in Capital } & 273,750 & \\\text { Cash } & & 300,000 \\\end{array}$

C) $\begin{array}{lccc}\text { Common Steck } & 26,250 & \\\text { Retained Earnings } & 90,000 & \\\text { Additional Paid-in Capital } & 183,750 & \\\quad \text { Cash } & & 300,006 \\\end{array}$

D) $\begin{array}{lccc}\text { Common Stock } & 26,250 & \\\text { Retained Earnings } & 136,875 & \\\text { Additional Iaid-in Capital } & 136,875 & \\\text { Cash } & & 300,000 \\\end{array}$

E) $\begin{array}{lccc}\text { Common Stock } & 26,250 & \\\text { Retained Earnings } & 163,801 & \\\text { Additional Paid-in Capital } & 109,949 & \\\text { Cash } & & 300,000\end{array}$