Dunavant Service Company views share repurchases as treasury stock. Dunavant purchased shares and then later sold the shares at more than their acquisition price. What is the effect of the sale of the treasury stock on each of the following?

	Retained earnings	Paid-in capital
a.	increase	increase
b.	increase	no effect
c.	no effect	no effect
d.	no effect	increase

why the answer is D . please explain to me the logic, thank you! I think treasury stock retained earnings decreases, common stock decrease.