Financing Lease Obligations

3 Months Ended

Feb. 29, 2020

Notes to Financial Statements

FINANCING LEASE OBLIGATIONS

NOTE D – FINANCING LEASE OBLIGATIONS

The Company is obligated under financing leases for telephone equipment. The Company leases equipment under two capital lease arrangements with NEC Financial Services. Pursuant to the leases, the lessor retains actual title to the leased property until the termination of the lease, at which time the equipment can be purchased for one dollar for each lease. The terms of the leases are 60 months with a combined monthly payment of $815, respectively. The assumed interest rates on the leases are 9.342%. The leases terminate in 2022.

Future minimum lease payments under these financing lease obligations as of February 29, 2020 are as follows:

2020	$	9,779
2021	$	9,779
2022	$	6,706
Total	$	26,264
Less: interest portion		3,258
Present value of net minimum lease payments	$	23,006
Less: current portion		7,965
Non-current portion	$	15,041

Financing lease obligations mature as follows:
Twelve Months Ended February 28:
2020	$	7,965
2021	$	8,742
2022	$	6,299
Principal payments remaining	$	23,006