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, 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

XYZ Companys year end is December 31, 20x1 and its financial statements are issued in the following March. On January 24, 20x2 a 10 year note payable came due and was paid by issuing XYZ common stock to the creditor. In its December 31, 20x1 balance sheet, XYZ should

		Report the note as a current liability because it was due on January 24, 20x2 only 24 days after the year end.
		Report the note as a long-term liability because it was not paid off with a current asset or replaced by another current liability.
		Report the note as a long-term liability because it was extinguished (paid off) on January 24, 20x2 only 24 days after the year end.
		Report the note as a long-term liability because it was a 10 year note.