Home Office, Inc., an accrual basis taxpayer, leases a copying machine to a new customer

on December $27,$ Year $1.$ The machine was to rent for $$500$ per month for a period of $36$

months beginning January $1,$ Year $2.$ The customer was required to prepay $6$ months rent

at the time the lease was signed on December $27,$ Year $1.$ The customer was also required

to pay a $$2,000$ damage deposit at the time the lease was signed. The damage deposit will

be returned to the taxpayer at the end of the lease if no damage occurs.

Determine the amount of gross income Home Office recognizes in Year $1.$