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The protons of methylene group between the two carbonyl groups in ethylacetoacetate are acidic in nature. When compounds containing such acidic protons are treated with bases the loose proton and form enolates.
In this particular example when ethylacetoacetate is reacted with methyl magnesium bromide, the methyl group abstracts the acidic proton and converts into methane gas. The enolate when hydrolyzed is again converted into ethylacetoacetate as shown below,
In this particular example when ethylacetoacetate is reacted with methyl magnesium bromide, the methyl group abstracts the acidic proton and converts into methane gas. The enolate when hydrolyzed is again converted into ethylacetoacetate as shown below,