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Leases | 12 Months Ended
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Dec. 31, 2023
Leases [Abstract] |
Leases | (7) Leases Financing with Sale-Leaseback The Company entered into a sale-leaseback arrangement (the “Lease Financing Agreement”) with TAC Leasing Co., Ltd.(“TLCL”) on August 6, 2020, for a total financing proceeds in the amount of RMB 16 million (approximately US$2.3 million). Under the sale-leaseback arrangement, Tengsheng Paper sold the Leased Equipment to TLCL for 16 million (approximately US$2.3 million). Concurrent with the sale of equipment, Tengsheng Paper leases back the equipment sold to TLCL for a lease term of three years. At the end of the lease term, Tengsheng Paper may pay a nominal purchase price of RMB 100 (approximately $14) to TLCL and buy back the Leased Equipment. The Leased Equipment in amount of $2,349,452 was recorded as right of use assets and the net present value of the minimum lease payments was recorded as lease liability and calculated with TLCL’s implicit interest rate of 15.6% per annum and stated at $567,099 at the inception of the lease on August 17, 2020. Tengsheng Paper made payments due according to the schedule. On July 17, 2023, the Company made a final payment on outstanding obligations and bought back the Lease Equipment at nominal price according to the agreement. The lease assets were reclassified as own assets and balance of Leased Equipment net of amortization were $nil and $1,939,970 as of December 31, 2023 and 2022, respectively. Operating lease as lessor The Company has a non-cancellable agreement to lease plant to tenant under operating lease for 1 year from November 2023 to November 2024. The lease does not contain contingent payments. The rental income of the year was paid in advance by the tenant in December 2023. Operating lease as lessee The Company leases space under non-cancelable operating leases for plant and production equipment. The lease does not have significant rent escalation holidays, concessions, leasehold improvement incentives, or other build-out clauses. Further, the lease does not contain contingent rent provisions. The lease include option to renew in condition that it is agreed by the landlord before expiry. Therefore, the majority of renewals to extend the lease terms are not included in its right-of-use assets and lease liabilities as they are not reasonably certain of exercise. The Company regularly evaluate the renewal options and when they are reasonably certain of exercise, the Company includes the renewal period in its lease term. As the Company’s leases do not provide an implicit rate, it uses its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments. The components of the Company’s lease expense are as follows:
|  | Year Ended |
|  | 2023 |
|  | RMB |
Operating lease cost |  |  | 141,189 |
Short-term lease cost |  |  | - |
Lease cost |  |  | 141,189 |
Supplemental cash flow information related to its operating lease was as follows for the period ended December 31, 2023:
|  | Year Ended |
|  | 2023 |
|  | RMB |
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |
Operating cash outflow from operating lease |  |  | 141,189 |
Maturities of its lease liabilities for all operating lease are as follows as of December 31, 2023:
December 31, |  | Amount |
2024 |  |  | 141,189 |
2025 |  |  | 141,189 |
2026 |  |  | 141,189 |
2027 |  |  | 141,189 |
2028 |  |  | 141,189 |
Thereafter |  |  | - |
Total operating lease payments |  | $ | 705,945 |
Less: Interest |  |  | (121,595 | )
Present value of lease liabilities |  |  | 584,350 |
Less: current portion, record in current liabilities |  |  | (100,484 | )
Present value of lease liabilities |  |  | 483,866 |
The weighted average remaining lease terms and discount rates for all of its operating leases were as follows as of December 31, 2023:
|  | December 31, |
|  | 2023 |
Remaining lease term and discount rate: |  | RMB |
Weighted average remaining lease term (years) |  |  | 4.6 |
Weighted average discount rate |  |  | 7.56 | %

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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 -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//842-20/tableOfContent + Details
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