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

Cash	$ 25,000	Postpetition liabilities	$ 200,000
Accounts receivable	60,000	Liabilities subject to compromise	1,500,000
Inventories	400,000	Common stock	300,000
Plant and equipment, net	1,200,000	Retained deficit	(315,000)
Total	$1,685,000	Total	$1,685,000

The plan of reorganization provides for the following:

*	Estimated reorganization value is $1,300,000.
*	Liabilities subject to compromise are replaced with $1,000,000 in notes payable and 80% of the new common stock issue.
*	Existing shareholders receive 20% of the new stock issue
*	Inventories and plant and equipment are written down to their fair values of $250,000 and $800,000, respectively.
*	There are no previously unreported identifiable intangible assets.

The entry to record restructuring of the interests of prior shareholders results in a credit to additional paid-in capital of:

	A.	$280,000
	B.	$220,000
	C.	$300,000
	D.	$200,000