elect from the option list provided the appropriate balance sheet classification for each balance sheet item below. Each choice may be used once, more than once, or not at all.

Balance sheet itemClassification$1.$ Preferred stock

$2.$ Trade accounts payable

$3.$ Bonds payable $($due in $15$ years$)$

$4.$ Note payable $($due in $7$ months$)$

$5.$ Direct costs of issuing common stock

$6.$ Treasury stock $($at cost$)$

$7.$ Appropriation for contingencies

$8.$ Discount on bonds payable

$9.$ Bonds payable issue costs

Insegrevious paid $$50,000$ for rent on April $1,$ Year $1.$ Rent is $$700$ per month, due on the last day of the month.

Insegrevious purchased new equipment for $$10,000$ on January $1,$ Year $2.$ The equipment has a useful life of $10$ years and has no salvage value. Insegrevious depreciates its equipment using the straight$-$line method.

Insegrevious took out a $10-$year loan for $$40,000$ on July $1,$ Year $3.$ Insegrevious must pay a total of $$12,000$ in interest over the life of the loan in equal monthly installments due at the end of each month. The entire balance of the loan is due June $30,$ Year $13.$ On July $1,$ Year $4,$ Insegrevious prepaid $$2,000$ of interest.

In Year $3,$ Insegrevious made the following investments:

$$4,000$ in available$-$for$-$sale securities$,$ all of which will be sold in Year $5$$$2,000$ in held$-$to$-$maturity securities