Flimm Company leases an asset over its estimated useful life of six years. At the inception of the lease, the present value of the lease payments is $240,000. The market value of the leased asset is $258,000.

Flimms journal entry to recognize the inception of the lease includes a credit to

Multiple Choice

• Lease liability for $258,000.

• Lease liability for $240,000.

• Accrued lease payable for 40,000.

• Accrued lease payable for 43,000.