an inducement to enter a lease, Gral Company, a lessor, granted Zep, Incorporated, a lessee, twelve months oT tree rent under a Tive-year operating lease. [ne lease was effective on January 1, 20X3, and provides for monthly rental payments to begin January 1, 20X4. Zep made the first rental payment on December 30, 20X3. In its 20X3 income statement, Graf should report rental revenue in an amount equal to Multiple Choice Cash received revenue in an amount equal to

Multiple Choice

Cash received during 20X3.

Zero.

One-fifth of the total cash to be received over the life of the lease.

One-fourth of the total cash to be received over the life of the lease.