Note 4 - Leases

12 Months Ended

Oct. 31, 2020

Notes to Financial Statements

Leases

Note 4 – Leases

The Company capitalizes all leased assets pursuant to ASU 2016-02, "Leases (Topic 842)," which requires lessees to recognize right-of-use assets and lease liability, initially measured at present value of the lease payments, on its balance sheet for leases with terms longer than 12 months and classified as either financing or operating leases. The Company does not have financing leases, only one operating lease for office space. The operating lease is for a term of five years, beginning August 1, 2020, with rent of $1,000 payable monthly. As the operating lease does not provide implicit interest rate, we estimated a current borrowing rate of 4.5% in determining the present value of the lease. As of October 31, 2020, the right-to-use (“ROU”) lease asset, net of accumulated amortization, was $70,133. The initial recognition of the ROU operating lease was $73,749 for both the ROU asset and ROU liability. The amortization expense for the ROU asset for the twelve months ended October 31, 2020 was $3,616 and one payment on the ROU liability was $2,836. At October 31, 2020, short-term ROU lease liability was $$11,709 and long-term liability was $59,204, totaling $70,913. Operating lease expense totaling $3,000 for August-October 2020 was accrued at fiscal year-end. No rent payments had been made as of October 31, 2020.

	2020	2021	2022	2023	2024	Total
Lease payments	$12,300	$13,500	$15,300	$18,000	$13,500	$72,600
Less discount						(1,687)
Present value of future payments						70,913
Less current obligations						(11,709)
Long term lease obligations						$59,204