Steve Drake sells a rental house on January 1, 2020, and receives $90,000 cash and a note for $55,000 at 7 percent interest. The purchaser also assumes the mortgage on the property of $30,000. Steve's original cost for the house was $172,000 on January 1, 2012 and accumulated depreciation was $32,000 on the date of sale. He collects only the $90,000 down payment in the year of sale.

His taxable gain is $35,000

Gross profit is $35,000

Contract price is $145,000

Installment Sale Income is $21,690

c. Assuming Steve collects $5,000 (not including interest) of the note principal in the year following the year of sale, calculate the amount of income recognized in that year under the installment sale method.

Round your answer to the nearest dollar. $fill in the blank