NOTE 3 - LEASE

9 Months Ended

Sep. 30, 2019

Notes

NOTE 3 - LEASE

NOTE 3 – LEASE

On April 1, 2019, we entered into a lease agreement with Colin Gibson, director, for the lease of an automobile. The lease is considered an operating lease, requires monthly payments of $350, and has a term of six years.

We have accounted for the lease under ASU 842 Leases, as follows:

	Balance Sheet Classification	September 30, 2019
Asset
Operating lease asset	Right of use asset	$	15,638
Total lease asset		$	15,638
Liability
Operating lease liability – current portion	Current operating lease liability	$	2,358
Operating lease liability – noncurrent portion	Long-term operating lease liability		13,280
Total lease liability		$	15,638

Lease obligations at September 30, 2019, consisted of the following:

For the year ended December 31:
2019	$	1,050
2020		4,200
2021		4,200
2022		4,200
2023		4,200
Thereafter		5,250
Total payments	$	23,100
Amount representing interest	$	7,462
Lease obligation, net		15,638
Less current portion		(2,358)
Lease obligation – long term	$	13,280

The lease expense for the three and nine months ended September 30, 2019, was $1,050 and $2,100, respectively, which for the nine months consisted of amortization expense of $1,110 and interest expense of $990. The cash paid under our operating lease during the nine months ended September 30, 2019, was $2,100. We have used a discount rate of 8%, which is our deemed incremental borrowing rate.