Finance Leases

3 Months Ended

Mar. 31, 2023

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 March 31, 2023, are shown in the following table.


2023	$	75,349
2024		49,859
Total minimum lease payments		125,208
Less amount representing interest		3,532
Present value of minimum lease payments		121,676
Less current portion		92,966
Finance lease obligations, net of current portion	$	28,710

Weighted average remaining lease term – finance leases		1.2	years
Weighted average discount rate – finance leases		4.29	%

The equipment under finance lease at March 31, 2023, and December 31, 2022, is included in the accompanying balance sheets as follows:


	March 31, 2023		Dec. 31, 2022
Machinery and equipment	$	385,923	$	385,923
Less accumulated depreciation and amortization		114,024		104,376
Net book value	$	271,899	$	281,547

Note 11. Finance Leases (continued)

These assets are amortized over a period of ten years using the straight-line method and amortization is included in depreciation expense. Finance lease costs totaled $24,840 and $23,783 for the three months ended March 31, 2023 and 2022, respectively.

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 was transferred to the Company in accordance with the terms of the leases and these assets have been excluded from the leased asset disclosure above.