CAPITAL LEASES

9 Months Ended

Sep. 30, 2018

Capital Leases in Financial Statements of Lessee Disclosure [Text Block]

NOTE 6 — CAPITAL LEASES

	September 30, 2018			December 31, 2017
Capital equipment lease dated April 5, 2018	$	13,921		$	-
Capital equipment lease dated May 8, 2018		15,965			-
Capital equipment lease dated June 27, 2018		23,697			-
Capital equipment lease dated September 18, 2018		16,686			-
Total capital leases payable		70,269			-
Less current portion		(24,773	)		-
Long term portion	$	45,496		$	-

During the nine months ended September 30, 2018, the Company entered into four capital leases for computer equipment for a three year term. The Company recognized these arrangements as a capital leases based on the determination the leases exceeded 75% of the economic life of the underlying assets. The Company initially recorded the equipment and the capitalized lease liability at the estimated present value of the minimum lease payments of $77,864.

The leases include base monthly payments in aggregate of $2,360,

due on the contract monthly anniversary of each calendar month. At the expiration of the lease, the Company is required to return all leased equipment to the lessor with right of repurchase at fair value. The Company has made payments in the amount of

$7,595 during the nine months ended September 30, 2018.

The Company determined that the capital leases exceeded 75% of the estimated economic life of the equipment and therefore classified as a capitalized leases. The effective interest rate of the capitalized lease is estimated at 6.00% based on the Company estimated incremental borrowing rate.

The following summarizes the assets under capital leases:

	September 30, 2018			December 31, 2017
Classes of property
Computer equipment		77,864			-
Less: accumulated depreciation		(8,648	)		-
	$	69,216		$	-

The following summarizes total future minimum lease payments at September 30, 2018:

Period ending December 31,
Three months ended December 31, 2018	$	5,240
2019		28,316
2020		28,316
2021		13,641
Total minimum lease payments		75,513
Amount representing interest		5,244
Present value of minimum lease payments		70,269
Current portion of capital lease obligations		24,773
Capital lease obligation, less current portion	$	45,496