Rails generate error - 'method_missing': undefined method 'active_record' -

i running rails 4.2.3 on os x yosemite 10.10.4. have 2 apps working fine, upon creating new app , trying use 'rails generate' running following error message:

/library/ruby/gems/2.0.0/gems/railties-4.2.3/lib/rails/railtie/configuration.rb:95:in `method_missing': undefined method `active_record' #<rails::application::configuration:0x007f9d11ae5ed8> (nomethoderror) /users/tompickard/documents/app/config/application.rb:24:in `<class:application>' /users/tompickard/documents/app/config/application.rb:10:in `<module:app>' /users/tompickard/documents/app/config/application.rb:9:in `<top (required)>' /library/ruby/gems/2.0.0/gems/spring-1.3.6/lib/spring/application.rb:82:in `require' /library/ruby/gems/2.0.0/gems/spring-1.3.6/lib/spring/application.rb:82:in `preload' /library/ruby/gems/2.0.0/gems/spring-1.3.6/lib/spring/application.rb:143:in `serve' /library/ruby/gems/2.0.0/gems/spring-1.3.6/lib/spring/application.rb:131:in `block in run' /library/ruby/gems/2.0.0/gems/spring-1.3.6/lib/spring/application.rb:125:in `loop' /library/ruby/gems/2.0.0/gems/spring-1.3.6/lib/spring/application.rb:125:in `run' /library/ruby/gems/2.0.0/gems/spring-1.3.6/lib/spring/application/boot.rb:18:in `<top (required)>' /system/library/frameworks/ruby.framework/versions/2.0/usr/lib/ruby/2.0.0/rubygems/core_ext/kernel_require.rb:55:in `require' /system/library/frameworks/ruby.framework/versions/2.0/usr/lib/ruby/2.0.0/rubygems/core_ext/kernel_require.rb:55:in `require' -e:1:in `<main>' 

i have tried various solutions no avail. please let me know if need more information

thanks