View Question
 ```Problem # 1 Kenneth J. Nelson has just purchased a new car for \$35,000. He paid \$5,000 down and signed a note for the remaining \$30,000. The interest rate on the note is 12% compounded monthly, or 1% per month. Required: 1. Compute the amount of Mr. Nelson's monthly payment if he plans to pay off the \$30,000 note in 30 monthly payments. Remember: The interest rate is 1% per month. 2. Repeat part (1) assuming that Mr. Nelson wishes to repay the note in 60 monthly payments. 3. Assume that Mr. Nelson decides to repay the note in 60 monthly payments. What is the balance remaining on the note immediately after he makes the 30th payment? Hint: Compute the present value of the remaining 30 payments. Problem # 2 On July 1, 2006, Paramount, Inc. issued \$500,000, 8%, 30-year bonds with interest paid semiannually on January 1 and July 1. The bonds were sold when the market rate of interest was 8%. On October 1, 2009, the bonds were retired when their fair market value was \$495,000. Required: Demonstrate, using the present value tables, that the bonds were sold for \$500,000. Provide the journal entry made on July 1 to record the issuance of the bonds. Provide the journal entry made on December 31, 2006, relating to interest. Provide the journal entries to record the retirement of the bonds. Problem # 3 Using the following information, determine how much external funding will be necessary during the coming period (if any). Collections from customers \$104,300 Minimum cash balance desired 25,000 Direct labor expense 24,350 Cash balance, beginning 32,000 Manufacturing overhead expense 22,750 Income tax expense 21,680 Selling and administrative expenses 54,140 Direct materials expense 43,200 Problem # 4 In 2001 Pandora, Inc., makes a rights issue at a subscription price of \$5 a share. One new share can be purchased for every four shares held. Before the issue there were 10 million shares outstanding and the share price was \$6. What is the total amount of new money raised? What is the expected stock price after the rights are issued?```