A firm has the following account balances for this year. Sales for the year are $420,000. Projected sales for next year are $441,000. The percentage of sales approach is used for pro forma purposes. All balance sheet accounts, except long-term debt and common stock, change according to that approach. The firm plans to decrease the long-term debt balance by $23,500 next year. Retained earnings is expected to increase by $5,400 next year. What is the projected external financing need? 
Definitions:
Notes Payable
This refers to a written promise to pay a certain amount of money, usually including interest, by a specific date, and is recognized as a liability on a company's balance sheet.
Effective Interest Method
An accounting practice used to allocate loan or bond interest expense over the life of the loan or bond based on the loan's amortized cost.
Interest Payment
The amount paid by a borrower to a lender as compensation for the use of borrowed money, usually expressed as a percentage of the principal amount.
Premium on Bonds Payable
The amount by which the bond's selling price exceeds its face value, representing an additional cost to the issuer.
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