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Leases | 12 Months Ended
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Jun. 30, 2021
Leases [Abstract] |
Leases | 13. LEASES The Company leases its facility in Milwaukee, Wisconsin from Koss Holdings, LLC, which is wholly-owned by the Company’s former Chairman. On January 5, 2017, the lease was renewed for a period of five years, ending June 30, 2023, and is being accounted for as an operating lease. The lease extension maintained the rent at a fixed rate of $380,000 per year and included an option to renew at the same rate for an additional five years ending June 30, 2028. The Company is responsible for all property maintenance, insurance, taxes and other normal expenses related to ownership. The Company used its incremental borrowing rate as of July 1, 2017, the retrospective date of adoption of ASU 2016-02 (Topic 842) Leases, to calculate the net present value of the operating lease ROU asset and liability. The five year renewal option was included in the calculation of the ROU asset and liability as the Company believes it is reasonably certain to exercise its right to renew. The non-lease components of the agreement related to common area maintenance charges are accounted for separately. Supplemental information related to lease expense and valuation of the ROU asset and liability was as follows:
|  |  | Year Ended
|  | 2021 |  | 2020
Operating lease cost |  | $ | 380,000 |  | $ | 380,000
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |  |  |
Operating cash flows from operating leases |  | $ | (380,000) |  | $ | (380,000)
Weighted-average remaining lease term (in years) |  |  | 7 |  |  | 8
Weighted-average discount rate |  |  | 4.25% |  |  | 4.25%
The maturity schedule of future minimum lease payments and reconciliation to the operating lease liabilities reported on the 2021 Consolidated Balance Sheet is as follows:
Year Ending June 30, |  |  |
2022 |  | $ | 380,000
2023 |  |  | 380,000
2024 |  |  | 380,000
2025 |  |  | 380,000
2026 |  |  | 380,000
Thereafter |  |  | 760,000
Total lease payments |  |  | 2,660,000
Present value adjustment |  |  | (354,545)
Total lease liabilities |  | $ | 2,305,455

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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 + Details
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