Rock Bottom Gold Company recently repurchased 7.09 million shares of its common stock for $56 per share and is holding the shares as treasury stock. The intent of the repurchase was to increase earnings per share to be more in line with competitors.

Required:

1. Determine the impact of the stock repurchase on total assets, total liabilities, and total stockholders equity.
2. Prepare the journal entry to record the repurchase.