NOTE 5 – OPERATING LEASE

The Company currently occupies office space in Burbank, California. The Company signed a three-year lease starting January 1, 2016. The lease has been extended for an additional three-year term. Current monthly lease payments are $3,855 with yearly increases.  The lease required a deposit of $3,500 which was paid on December 10, 2015. The lease is being accounted for under ASU 2016-02 Leases (Topic 842). The Company recorded an initial Right of Use of Asset and Lease Obligation of $122,825. As of June 30, 2020, the Company has accrued rent due of $21,653 and a Lease Obligation of $66,442.

Lease obligations at June 30, 2020 consisted of the following:

The lease expense for the three months ended June 30, 2020 was $11,564, which consisted of amortization expense of $10,098 and interest expense of $1,466.

The lease expense for the six months ended June 30, 2020 was $23,128, which consisted of amortization expense of $19,996 and interest expense of $3,132.

The lease expense for the three months ended June 30, 2019 was $11,227, which consisted of amortization expense of $9,004 and interest expense of $2,223.

The lease expense for the six months ended June 30, 2019 was $22,454, which consisted of amortization expense of $17,831 and interest expense of $4,623.

The cash paid under this operating lease during the six months ended June 30, 2020 was $18,918. At June 30, 2020, the weighted average remaining lease term is 1.50 years and the weighted average discount rate is 8%.