1. The lone pair on the negatively charged oxygen in the carboxylate group is protonated by HCl, forming a carboxylic acid.

2. The carboxylic acid reacts with the beta-ketone to form an enol, and producing CO2 as a byproduct.

3. The enol is deprotonated by a chloride ion to form an enolate.

4. The electrons from the enolate comes down to reform the ketone, and the double bond is protonated by HCl; meanwhile, it forms a new stereocenter.

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Ketalization

5. The oxygen in the carbonyl of the ketone is protonated by HCl making a better electrophile.

6. The oxygen in the primary alcohol attacks the carbon of the carbonyl and pushes the electrons from the double bond up to the protonated oxygen, forming the new five-membered ring.

7. The oxygen in the new five member ring is deprotonated by a chloride ion forming the product and its diastereomer.