Right of Use Assets

3 Months Ended

Mar. 31, 2020

Notes to Financial Statements

RIGHT OF USE ASSETS

10. RIGHT OF USE ASSETS

The Company entered into two leases for office space and one automobile lease that are classified as right of use assets and lease liabilities. The lease for the Company’s office spaces expire in April 2020 and June 2022. The lease for the automobile expires in June 2021. As the implicit interest rate is not readily identifiable in the leases, the Company calculated the present value of the leases using the average commercial real estate interest rate of 5.50% at the commencement of the office leases and the interest rate of 2.99% for the automobile lease. Applying the commercial rate, the Company calculated the present value of $294,203 for the office leases and $29,037 for the automobile leasing, that are being amortized over the life of the leases.

As of March 31, 2020, the right of use assets associated with future operating leases are as follows:

Total present value of right of use assets under lease agreements	$	323,240
Amortization of right of use assets		(107,508	)
Total right of use assets as of March 31, 2020	$	215,732

Total amortization expense related to the right of use assets under the lease agreements was $45,059 and $12,087 for the three month periods ended March 31, 2020 and 2019, respectively.