This is a simulation of the game Cows and Bulls with three digit numbers

I am trying to get the number of cows and bulls between two numbers. One of which is generated by the computer and the other is guessed by the user. I have parsed the two numbers I have so that now I have two lists with three elements each and each element is one of the digits in the number. So:

237 will give the list [2,3,7]. And I make sure that the relative indices are maintained.the general pattern is:(hundreds, tens, units).

And these two lists are stored in the two lists: machine and person.

ALGORITHM 1

So, I wrote the following code, The most intuitive algorithm:

cows and bulls are initialized to 0 before the start of this loop.

for x in person:
    if x in machine:
        if machine.index(x) == person.index(x):
            bulls += 1
            print x,' in correct place'
        else:
            print x,' in wrong place'
            cows += 1

And I started testing this with different type of numbers guessed by the computer.

Quite randomly, I decided on 277. And I guessed 447. Here, I got the first clue that this algorithm may not work. I got 1 cow and 0 bulls. Whereas I should have got 1 bull and 1 cow.

This is a table of outputs with the first algorithm:

Guess        Output            Expected Output

447     0 bull, 1 cow          1 bull, 1 cow 
477     2 bulls, 0 cows        2 bulls, 0 cows
777     0 bulls, 3 cows        2 bulls, 0 cows

So obviously this algorithm was not working when there are repeated digits in the number randomly selected by the computer.

I tried to understand why these errors are taking place, But I could not. I have tried a lot but I just could not see any mistake in the algorithm(probably because I wrote it!)

ALGORITHM 2

On thinking about this for a few days I tried this:

cows and bulls are initialized to 0 before the start of this loop.

for x in range(3):
    for y in range(3):
            if x == y and machine[x] == person[y]:
                bulls += 1
            if not (x == y) and machine[x] == person[y]:                   
                cows += 1

I was more hopeful about this one. But when I tested this, this is what I got:

Guess        Output            Expected Output

447     1 bull, 1 cow          1 bull, 1 cow 
477     2 bulls, 2 cows        2 bulls, 0 cows
777     2 bulls, 4 cows        2 bulls, 0 cows

The mistake I am making is quite clear here, I understood that the numbers were being counted again and again.

i.e.: 277 versus 477

When you count for bulls then the 2 bulls come up and thats alright. But when you count for cows:

1. the 7 in 277 at units place is matched with the 7 in 477 in tens place and thus a cow is generated.
2. the 7 in 277 at tens place is matched with the 7 in 477 in units place and thus a cow is generated.'

Here the matching is exactly right as I have written the code as per that. But this is not what I want. And I have no idea whatsoever on what to do after this.

Furthermore...

I would like to stress that both the algorithms work perfectly, if there are no repeated digits in the number selected by the computer.

Please help me with this issue.

P.S.: I have been thinking about this for over a week, But I could not post a question earlier as my account was blocked(from asking questions) because I asked a foolish question. And did not delete it even though I got 2 downvotes immediately after posting the question.