On 1^st January 2015, Trademart SAOG entered into an agreement to lease an item of plant from a manufacturer for 5 years. The lease requires five annual payments of RO 200,000 each commencing from 1^st January 2016. The plant would have a useful life of five years and with no residual value. The present value of the total lease payments is OMR 840,000. The cost of capital used is 12% find the initial amount of lease liability right to use asset recognition in the first year in the books of lessee.

None of them

Lease liability OMR 640,000 and right to use asset OMR 840,000

Lease liability OMR 640,000 and right to use asset OMR 640,000

Lease liability OMR 840,000 and right to use asset OMR 840,000