17. CAPITAL LEASE OBLIGATION

3 Months Ended

Mar. 31, 2013

Capital Lease Obligations [Abstract]

CAPITAL LEASE OBLIGATION

17. CAPITAL LEASE OBLIGATION

In November 2009, the Group entered a six-year capital lease agreement for certain equipment under construction. The terms of the lease required an initial payment of RMB5 million (or approximately $805,062) and require an RMB1 million (or approximately $161,012) payment on January 30th of each year after successful completion of production quality tests. The installment and trial run of the equipment had been completed by December 31, 2010, and the equipment under the capital lease is depreciated over an estimated productive life of 14 years when placed into service after passing production quality tests. As of March 31, 2013 and December 31, 2012, the Group had $1,011,529 and $1,100,366, respectively, of equipment subject to the capital lease obligation.

Minimum future lease payments under capital leases as of March 31, 2013 were as follows:

	Future payments
	US$
2013		161,012
2014		161,012
2015		161,012
Total minimum lease payments at March 31, 2013		483,036
Less amount representing interest		(41,307	)
Net present value of minimum lease payments		441,729
Current portion of capital lease obligation		(139,973	)
Non-current portion of capital lease obligation		301,756

The interest rate on the capital lease is 5.31%. There was $5,697 and $7,415 in amortization of interest recorded for the three months ended March 31, 2013 and 2012, respectively. Accumulated amortization was $109,962 and $104,265 as of March 31, 2013 and December 31, 2012, respectively.