Note 5. Lease Obligations

On December 30, 2016, the Company entered into a 48 month non-cancellable lease for its office facilities that will require monthly payments ranging from $10,350 to $11,475 through January 2021. In accounting for the lease, the Company adopted ASU 2016‑02, Leases which requires a lessee to record a right-of-use asset and a corresponding lease liability at the inception of the lease initially measured at the present value of the lease payments. The Company classified the lease as an operating lease and determined that the value of the lease assets and liability at the inception of the lease was $463,000 using a discount rate of 3.75%. During the twelve months ended June 30, 2020, the Company made payments of $129,187 towards the lease liability. As of June 30, 2020 and 2019, lease liability amounted to $79,326 and $208,513, respectively. ASU 2016‑02 requires recognition in the statement of operations of a single lease cost, calculated so that the cost of the lease is allocated over the lease term, generally on a straight-line basis. Rent expense, including real estate taxes, for the years ended June 30, 2020 and 2019 was $111,746 and $144,963, respectively. The right of use asset at June 30, 2019 was $192,245. During the years ended June 30, 2020 and 2019, the Company reflected amortization of right of use asset of $119,914 and $115,079 related to this lease, respectively, resulting in a net asset balance of $72,331 as of June 30, 2020.

Future minimum lease payments under the leases are as follows:


Years Ending June 30,	Amount
2021	$	80,356
Total payments		80,356
Less: Amount representing interest		1,030
Present value of net minimum lease payments		79,326
Less: Current portion		79,326
Non-current portion	$	—