diff --git a/observe/resource_monitor.go b/observe/resource_monitor.go
index 336161bc..51b2eaf8 100644
--- a/observe/resource_monitor.go
+++ b/observe/resource_monitor.go
@@ -380,7 +380,6 @@ func resourceMonitor() *schema.Resource {
 									"log_stage_index": {
 										Type:     schema.TypeInt,
 										Optional: true,
-										Default:  0,
 									},
 									"source_log_dataset_id": {
 										Type:     schema.TypeString,
@@ -630,7 +629,11 @@ func newMonitorRuleConfig(data *schema.ResourceData) (ruleInput *gql.MonitorRule
 			idx := v.(int)
 			stageId := fmt.Sprintf("stage-%d", idx)
 			ruleInput.LogRule.LogStageId = &stageId
+		} else {
+			stageId := "stage-0"
+			ruleInput.LogRule.LogStageId = &stageId
 		}
+
 		if v, ok := data.GetOk("rule.0.log.0.source_log_dataset_id"); ok {
 			is, _ := oid.NewOID(v.(string))
 			ruleInput.LogRule.SourceLogDatasetId = &is.Id
@@ -909,18 +912,6 @@ func flattenRule(data *schema.ResourceData, input gql.MonitorRule, stageIds []st
 	}
 
 	if logRule, ok := input.(*gql.MonitorRuleMonitorRuleLog); ok {
-		id := oid.OID{
-			Type: oid.TypeDataset,
-			Id:   *logRule.SourceLogDatasetId,
-		}
-		// check for existing version timestamp we can maintain
-		// same approach as in flattenAndSetQuery() for input datasets
-		if v, ok := data.GetOk("rule.0.log.0.source_log_dataset_id"); ok {
-			prv, err := oid.NewOID(v.(string))
-			if err == nil && id.Id == prv.Id {
-				id.Version = prv.Version
-			}
-		}
 		stageIndex := 0
 		for i, sId := range stageIds {
 			if sId == logRule.LogStageId {
@@ -930,12 +921,27 @@ func flattenRule(data *schema.ResourceData, input gql.MonitorRule, stageIds []st
 		}
 
 		log := map[string]interface{}{
-			"compare_function":      toSnake(string(logRule.CompareFunction)),
-			"compare_values":        logRule.CompareValues,
-			"lookback_time":         logRule.LookbackTime.String(),
-			"expression_summary":    logRule.ExpressionSummary,
-			"log_stage_index":       stageIndex,
-			"source_log_dataset_id": id.String(),
+			"compare_function":   toSnake(string(logRule.CompareFunction)),
+			"compare_values":     logRule.CompareValues,
+			"lookback_time":      logRule.LookbackTime.String(),
+			"expression_summary": logRule.ExpressionSummary,
+			"log_stage_index":    stageIndex,
+		}
+		if logRule.SourceLogDatasetId != nil {
+			id := oid.OID{
+				Type: oid.TypeDataset,
+				Id:   *logRule.SourceLogDatasetId,
+			}
+			// check for existing version timestamp we can maintain
+			// same approach as in flattenAndSetQuery() for input datasets
+			if v, ok := data.GetOk("rule.0.log.0.source_log_dataset_id"); ok {
+				prv, err := oid.NewOID(v.(string))
+				if err == nil && id.Id == prv.Id {
+					id.Version = prv.Version
+				}
+			}
+
+			log["source_log_dataset_id"] = id.String()
 		}
 
 		rule["log"] = []interface{}{log}
diff --git a/observe/resource_monitor_test.go b/observe/resource_monitor_test.go
index 5f593026..b4ca1577 100644
--- a/observe/resource_monitor_test.go
+++ b/observe/resource_monitor_test.go
@@ -562,7 +562,6 @@ func TestAccObserveMonitorLog(t *testing.T) {
 					name      = "%[1]s"
 
 					inputs = {
-						// "test" = observe_datastream.test.dataset
 						"test" = observe_dataset.first.oid
 					}
 
@@ -570,6 +569,12 @@ func TestAccObserveMonitorLog(t *testing.T) {
 						pipeline = <<-EOF
 							colmake kind:"test", description:"test"
 						EOF
+						output_stage = true
+					}
+					stage {
+						pipeline = <<-EOF
+							filter kind ~ "test"
+						EOF
 					}
 
 					rule {
@@ -580,7 +585,66 @@ func TestAccObserveMonitorLog(t *testing.T) {
 							compare_values     = [1]
 							lookback_time      = "1m"
 							expression_summary = "Some text"
-							log_stage_index = 0
+							log_stage_index = 1
+						}
+					}
+
+					notification_spec {
+						merge      = "separate"
+					}
+				}`, randomPrefix),
+				Check: resource.ComposeTestCheckFunc(
+					resource.TestCheckResourceAttr("observe_monitor.first", "name", randomPrefix),
+					resource.TestCheckResourceAttr("observe_monitor.first", "rule.0.log.0.compare_function", "greater"),
+					resource.TestCheckResourceAttr("observe_monitor.first", "rule.0.log.0.compare_values.0", "1"),
+					resource.TestCheckResourceAttr("observe_monitor.first", "rule.0.log.0.lookback_time", "1m0s"),
+					resource.TestCheckResourceAttr("observe_monitor.first", "rule.0.log.0.expression_summary", "Some text"),
+					resource.TestCheckResourceAttr("observe_monitor.first", "rule.0.log.0.log_stage_index", "1"),
+				),
+			},
+			{
+				Config: fmt.Sprintf(monitorConfigPreamble+`
+				resource "observe_dataset" "first" {
+					workspace                        = data.observe_workspace.default.oid
+					name 	                         = "%[1]s-first"
+
+					inputs = {
+					  "test" = observe_datastream.test.dataset
+					}
+
+					stage {
+					  pipeline = <<-EOF
+						make_col vt:BUNDLE_TIMESTAMP
+						make_interval vt
+					  EOF
+					}
+				}
+
+				resource "observe_monitor" "first" {
+					workspace = data.observe_workspace.default.oid
+					name      = "%[1]s"
+
+					inputs = {
+						"test" = observe_dataset.first.oid
+					}
+
+					stage {
+						pipeline = <<-EOF
+							filter OBSERVATION_INDEX != 0
+						EOF
+					}
+					stage {
+						pipeline = "timechart 1m, frame(back:10m), A_ContainerLogsClean_count:count(), group_by()"
+					}
+
+					rule {
+						source_column = "A_ContainerLogsClean_count"
+
+						log {
+							compare_function   = "greater"
+							compare_values     = [1]
+							lookback_time      = "1m"
+							expression_summary = "Some text"
 							source_log_dataset_id = observe_dataset.first.oid
 						}
 					}
@@ -591,7 +655,12 @@ func TestAccObserveMonitorLog(t *testing.T) {
 				}`, randomPrefix),
 				Check: resource.ComposeTestCheckFunc(
 					resource.TestCheckResourceAttr("observe_monitor.first", "name", randomPrefix),
-					//TODO
+					resource.TestCheckResourceAttr("observe_monitor.first", "rule.0.log.0.compare_function", "greater"),
+					resource.TestCheckResourceAttr("observe_monitor.first", "rule.0.log.0.compare_values.0", "1"),
+					resource.TestCheckResourceAttr("observe_monitor.first", "rule.0.log.0.lookback_time", "1m0s"),
+					resource.TestCheckResourceAttr("observe_monitor.first", "rule.0.log.0.expression_summary", "Some text"),
+					resource.TestCheckResourceAttr("observe_monitor.first", "rule.0.log.0.log_stage_index", "0"),
+					resource.TestCheckResourceAttrPair("observe_monitor.first", "rule.0.log.0.source_log_dataset_id", "observe_dataset.first", "oid"),
 				),
 			},
 		},