Note 3 - Net Investment in Sales Type Lease |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes to Financial Statements | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Lessor, Sales-type Leases [Text Block] |
In January 2021, the Company entered into a year lease with a customer for hardware which had an implied interest rate of 6%.
At inception, the Company recorded $210,782 in "Net investment in sales type leases" and derecognized $139,521 from “Inventory" on its condensed balance sheet. The Company recognized $71,261 in profit from sales type leases in its condensed statements of operations for the six months ended June 30, 2021 as a result of the transaction. For the three months ended June 30, 2021 the Company recognized $5,757 of interest income in the Company's condensed statements of operations
The future minimum lease payments receivable for sales type leases are as follows:
The total net investments in sales type leases, as of June 30, 2021 was $195,525. The current portion of $38,209 is included in Current Assets on the condensed balance sheet as of June 30, 2021, and the long term portion of $157,316 is included in Long-Term Assets on the condensed balance sheet as of June 30, 2021. The lease contains a purchase option at the conclusion of the lease, which the Company has determined does not meet the probability criterion. The Company has not recorded an unguaranteed residual asset.
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