Quarterly report pursuant to Section 13 or 15(d)

OPERATING LEASE

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OPERATING LEASE
 9 Months Ended
Sep. 30, 2020
Notes to Financial Statements  
OPERATING LEASE

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 September 30, 2020, the Company has accrued rent due of $34,280 and a Lease Obligation of $54,777.

 

 

Asset   Balance Sheet Classification   September 30, 2020   December 31, 2019
Operating lease asset   Right of use asset   $ 54,777     $ 85,077  
Total lease asset       $ 54,777     $ 85,077  
                     
Liability                    
Operating lease liability – current portion   Current operating lease liability   $ 44,389     $ 40,806  
Operating lease liability – noncurrent portion   Long-term operating lease liability     11,752       45,632  
Total lease liability       $ 56,141     $ 86,438  

 

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

 

For the year ended December 31:    
2020   $ 11,564  
2021     47,643  
Total payments   $ 59,207  
Amount representing interest   $ (3,066 )
Lease obligation, net     56,141  
Less current portion     (44,389 )
Lease obligation – long term   $ 11,752  

 

The lease expense for the three months ended September 30, 2020 was $11,564, which consisted of amortization expense of $10,301 and interest expense of $1,263.

 

The lease expense for the nine months ended September 30, 2020 was $34,691, which consisted of amortization expense of $30,297 and interest expense of $4,394.

 

The lease expense for the three months ended September 30, 2019 was $11,227, which consisted of amortization expense of $9,186 and interest expense of $2,041.

 

The lease expense for the nine months ended September 30, 2019 was $33,680, which consisted of amortization expense of $27,017 and interest expense of $6,663.

 

The cash paid under this operating lease during the nine months ended September 30, 2020 was $25,918. At September 30, 2020, the weighted average remaining lease term is 1.25 years and the weighted average discount rate is 8%.