Luke Company built and leased a $35,000 machine to Ben Corporation. The lease was signed on January 1, 2020. The lease is for a 4-year period. The first payment of the 4 annual payments was made on the day the lease was signed. The economic life of this machine is 5 years. Luke sets the payments to earn a rate of return of 8% and expects the residual value of the machine will be $1,000 at the end of the lease term. Machine is not specialized in nature. Luke and Ben both have a fiscal year end of 12/31. Round to the nearest dollar. If the lease has a guaranteed residual value of $500 and the machine cost Luke $21,000. This lease is correctly accounted for by Luke as a sales-type finance lease. What is the gross profit of the transaction Luke will record on Jan 1, 2020?