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CITY OF PARIS, TEXAS <br />Notes to Financial Statements (Continued) <br />September 30, 2022 <br />IV. Detailed Notes on All Activities and Funds (Continued) <br />J. Financed Purchases (Continued) <br />The future minimum payments required under the financing purchase and the present value of the net minimum <br />payments as of September 30, 2022, are as follows: <br />Year Ending September 30, Amount <br />2023 $ 72,353 <br />2024 72,353 <br />2025 72,352 <br />Total Minimum Payments 217,058 <br />Less: Amount Representing Interest (12,470) <br />Present Value of Net Minimum Payments 204,588 <br />Less: Current Maturities of Financing Purchase Obligation (66,213) <br />Long -Term Portion of Financing Purchase Obligation $ 138,375 <br />In January 2016, the City began leasing equipment under an agreement classified as a financing purchase due to <br />a bargain purchase option. Equipment purchased through the agreement are pledged as security for repayment <br />of the lease liability. The present value and accumulated amortization are as follows: <br />Financed Purchase — Equipment, at Cost $ 975,185 <br />Less: Accumulated Amortization 550,317 <br />Financed Purchase — Equipment, Net $ 424,868 <br />The future minimum payments required under the financing purchase and the present value of the net minimum <br />payments as of September 30, 2022, are as follows: <br />Year Ending September 30, Amount <br />2023 $ 114,337 <br />2024 114,337 <br />2025 114,337 <br />2026 114,337 <br />Total Minimum Payments 457,348 <br />Less: Amount Representing Interest (32,480) <br />Present Value of Net Minimum Payments 424,868 <br />Less: Current Maturities of Financing Purchase Obligation (101,587) <br />Long -Term Portion of Financing Purchase Obligation $ 323,281 <br />K. Long -Term Liabilities <br />In the government -wide financial statements and proprietary funds in the fund financial statements, long-term <br />debt and other long-term obligations are reported as liabilities in the applicable governmental activities, <br />business -type activities, or proprietary funds statement of net position. Bond premiums and discounts are <br />deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are <br />reported net of the applicable bond premium or discount. Bond issuance costs are reported as expenses in the <br />year of issuance. <br />In the fund financial statements, governmental funds recognize bond premiums and discounts, as well as <br />issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. <br />Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances <br />66 <br />