On January 1, Pacer Co. sold land that cost $20,000 for $50,000, receiving a note bearing interest at 5%. The note will be paid in three annual...

On January 1, Pacer Co. sold land that cost $20,000 for $50,000, receiving a note bearing interest at 5%. The note will be paid in three annual installments of $18,360 starting on December 31. Because collection of the note was deemed to be very uncertain, Pacer chose to use the cost recovery method. The first installment payment of $18,360 was received on Dec. 31. How much gross profit from this sale should Pacer recognize on the December 31 income statement