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FINANCE LEASE
3 Months Ended
Jan. 02, 2022
Finance Lease  
FINANCE LEASE

NOTE 5. FINANCE LEASE

 

In October 2021, the Company entered into a financing lease for certain property related to a Christmas Lights drive through display at its Missouri Park. Future minimum lease payments, by year, with the present value of such payments as of January 2, 2022, are shown in the following table:

 

      
2023  $160,863 
2024   160,863 
Total minimum lease payments   321,726 
Less amount representing interest   (16,086)
Present value of minimum lease payments   305,640 
Less current portion   (155,836)
Long-term portion of finance lease obligation  $149,804 

  

The property under the finance lease at January 2, 2022 is included in the accompanying balance as follows:

 

      
Christmas Light Display   464,492 
Less accumulated amortization   (154,831)
Right of use asset, net  $309,661 

 

 

PARKS! AMERICA, INC. and SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

January 2, 2022

 

NOTE 5. FINANCE LEASE (CONTINUED)

 

The right of use asset for this equipment is being amortized over the three-year term of the lease, on a systematic basis which management believes best represent the pattern in which the Company will consume the economic benefits thereof. As such, the full annual amortization expense has been and will be recognized during the first three months of the Company’s fiscal year. The weighted-average remaining lease term is 24 months, and the weighted average discount rate is 3.75%. The lease also includes full-service installation, maintenance, removal and storage of the right of use asset, with an annual cost of $63,070, which is being treated as a period expense.

 

The Company has the right to purchase the right of use asset during and at the end of the lease period, as follows:

 

      
Current  $357,228 
After 2023 display   196,365 
After 2024 display   35,502