Finance Leases

9 Months Ended

Sep. 30, 2022

Finance Leases

Finance Leases

Note 11. Finance Leases

The Company leases certain equipment under finance leases. Future minimum lease payments, by year, with the present value of such payments, as of September 30, 2022, are shown in the following table.

2022	$	26,325
2023		101,675
2024		49,859
Total minimum lease payments		177,859
Less amount representing interest		6,772
Present value of minimum lease payments		171,087
Less current portion		99,909
Finance lease obligations, net of current portion	$	71,178

The equipment under finance lease at September 30, 2022, and December 31, 2021, is included in the accompanying balance sheets as follows:

	September 30, 2022		Dec. 31, 2021
Machinery and equipment	$	385,923	$	385,923
Less accumulated depreciation and amortization		94,728		65,783
Net book value	$	291,195	$	320,140

These assets are amortized over a period of ten years using the straight-line method and amortization is included in depreciation expense.

The finance leases are structured such that ownership of the leased asset reverts to the Company at the end of the lease term. Accordingly, leased assets are depreciated using the Company’s normal depreciation methods and lives. Ownership of certain assets were transferred to the Company in accordance with the terms of the leases and these assets have been excluded from the leased asset disclosure above.