Investment in account receivable
|6 Months Ended|
Jun. 30, 2021
|Investment in account receivable||
Note 4 – Investment in account receivable
On April 10, 2015, the Company entered into an exchange agreement whereby the Company received an investment in an account receivable with annual installment payments of $117,000 for 11 years, through 2026, totaling $1,287,000 in exchange for shares of Mentor Common Stock obtained through exercise of 757,059 Series D warrants at $1.60 per share plus a $0.10 per warrant redemption price.
The Company valued the transaction based on the market value of Company common shares exchanged in the transaction, resulting in a 17.87% discount from the face value of the account receivable. The discount is being amortized monthly to interest over the 11-year term of the agreement. In the fourth quarter of 2020, we were notified that due to the effect of COVID-19 on the estimated receivable, we may not receive the 2020 installment payment or the full 2021 installment payment. Based on management’s collection estimates, we recorded an impairment of $139,148 and $139,148 on the investment in account receivable at June 30, 2021 and December 31, 2020, respectively.
The investment in account receivable consists of the following at June 30, 2021 and December 31, 2020:
Schedule of receivables with imputed interest
For the three months ended June 30, 2021 and 2020, $15,228 and $19,872 of discount amortization is included in interest income, respectively. For the six months ended June 30, 2021 and 2020, $30,456 and $38,217 of discount amortization is included in interest income, respectively.
The entire disclosure for financing receivable.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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