A company emerging from Chapter 11 reorganization has the following balance sheet:

Current assets	$ 150,000	Postpetition liabilities	$ 100,000
Noncurrent assets	900,000	Liabilities subject to compromise	1,000,000
		Common stock	200,000
	_______	Retained deficit	(250,000)
Total	$1,050,000	Total	$1,050,000

The plan of reorganization provides for the following:

*	Estimated reorganization value is $750,000.
*	Liabilities subject to compromise are replaced with $500,000 in notes payable and 60% of the new common stock issue.
*	Existing shareholders receive 40% of the new stock issue.
*	Noncurrent assets are written down by $300,000.

The entry to record settlement of liabilities subject to compromise results in a gain on discharge of debt of:

	A.	$490,000
	B.	$410,000
	C.	$500,000
	D.	$390,000