Taft Company sells Lee Company a machine, the usual cash price of which is $10,000, in exchange for an $11,800 non-interest-bearing note due three years from date. If Taft records the note at $11,800, the overall effect will be

		A correct sales price and correct interest revenue
		A correct sales price and understated interest revenue
		An understated sales price and understated interest revenue
		An overstated sales price and understated interest revenue

In the situation described in question above, if Lee records the asset and note at $10,000, the overall effect will be

		A correct acquisition cost and correct interest expense
		A correct acquisition cost and understated interest expense
		An understated acquisition cost and understated interest expense
		An overstated acquisition cost and understated interest expense