Spencer Limited has 50,000 common shares outstanding, with an average issue price per share of $8. On August 1,2020, the company reacquired and cancelled 600 shares at $40 per share. There was a contributed surplus of $0.25 per share at the time of reacquisition (total $12,500), which arose from net excess of proceeds over cost on a pervious cancellation of common shares.

(a) Prepare journal entry to record this transaction