Determine rri has appropriately accounted

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In December of 2020, RRI performed a renovation for Finley Fibbs, a lawyer. In return for the renovation, Finley provided 20 hours of legal service to RRI. Finley's regular billing rate is $250 per hour. The renovation work performed by RRI would have been billed at $4,000, had it not been an exchange for services. The renovation cost $2,750 in materials and labour.

Lucky recorded the following journal entry to account for this transaction:

DR Cost of renovation 2,750
CR Cash 2,750
However, she is not sure if this journal entry is correct.

Problem 1: Determine whether RRI has appropriately accounted for this transaction and, if not, recommend the appropriate treatment.

Reference no: EM132959956

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