What is the right course of action?

Your choice 1 and 2 is correct.

Because you are coming from the road with the “Yield” sign, you must give way to all traffic on the priority road you are entering. That includes the motorcycle coming from the left going straight through the junction, so you must let it pass first (answer 1).

The bus is coming from the opposite direction and is turning left across the junction. Even though you have to yield to traffic on the priority road, the bus must still follow the left-turn rule: anyone turning left must yield to oncoming traffic going straight or turning right. Since you are going straight ahead, the bus must wait for you once the motorcycle has passed (answer 2).

Rule of thumb for similar questions: First obey signs (Yield/Stop overrides “right before left”). Then apply turning rules: left-turners yield to oncoming straight/right traffic.