The right-of-use asset is increased by initial direct costs incurred by the lessee only. prepaid lease payments only. lease prepayments made by the lessee and initial direct costs incurred by the lessee. lease incentives received. The right-of-use asset is increased by initial direct costs incurred by the lessee only. prepaid lease payments only. lease prepayments made by the lessee and initial direct costs incurred by the lessee. lease incentives received