OPERATING LEASES

12 Months Ended

Dec. 31, 2021

NOTE 10 – OPERATING LEASES

Operating Leases - Lessee

On December 22, 2018, the Company leased a vehicle from the majority shareholder. See further details of this lease in Note 7. On October 8, 2021, the vehicle was sold to the lessee for $19,008 and the lease was terminated.

Operating Leases – Lessor

The Company entered into an agreement with a principal vendor for the lease of a Company vehicle. The lease is classified as a lessor operating lease under ASC 842. The term of the lease is 24 months, effective January 2019 and expiring December 2020. Depreciation expense for the vehicle subject to the lease is provided on the straight-line method over the useful life of the vehicle in accordance with the Company’s normal depreciation policy. Estimated and actual residual values are reviewed on a regular basis to determine that depreciation amounts are appropriate. On October 8, 2021, the vehicle was sold to the lessee for $19,008. Depreciation expense related to the vehicle was $4,513 and $6,018 for the years ended December 31, 2021 and 2020, respectively.

Investments in operating leases are as follows at December 31:

Schedule of operating leases
	2021		2020
Machinery and equipment, at cost	$	–	$	30,089
Accumulated depreciation		–		(12,036	)
Net investments in operating leases	$	–	$	18,053

Teardroppers, Inc. 10-K