Lidiot Co. commenced its existence on January 1 of the current year. Its articles of incorporation authorize the issuance of 1 million shares of $10 par value common stock. On February 1, it issued 200,000 shares for $2.5 million. On April 30, 8,000 shares were issued to a management consultant in exchange for services rendered. These services had a fair value of $120,000. On November 1, Lidiot issued 40,000 shares for a plant site when the fair value of the stock was $17.50 per share.

(i) Prepare journal entries to record the issuances of the stocks

(ii) Assuming that the foregoing were the only transactions affecting the paid-in capital accounts in the first year of Lidiots operations, what was the balance of additional paid-in capital at year end?

A) $840,000

B) $800,000

C) $540,000

D) $500,000

Please briefly explain.