On 1 July 2018, Tanya Ltd leased a photocopier from Baro Ltd, a company that manufactures, retails and leases copiers. The photocopier had cost Baro Ltd $30,000 to make but had a fair value on 1 July 2018 of $35,080. The lease agreement contained the following provisions:

• Lease term: 3 years
• Annual payment, payable in advance on 1 July each year: $14,500
• Economic life of the copier: 4 years
• Estimated residual value at the end of the lease term when the copier is returned to Baro Ltd: $3,000
• Residual value guaranteed by Tanya Ltd: $1,000
• Interest rate implicit in the lease: 10%
• Net investment in the lease: $35,080
• The lease is cancellable, provided another lease is immediately entered into.
• The annual payment includes an amount of $2,500 per annum to reimburse Baro Ltd for the cost of paper and toner supplied to Tanya Ltd.
• On 30 June 2021, at the end of the lease term, Tanya Ltd returned the copier to Baro Ltd, which sold the copier for $3,000.

On 1 July 2018, the debit Cost of Sales recorded by Baro Ltd should amount to: