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What is the appropriate treatment

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Question - In December of 2019, 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.

Was this correctly recorded? If not, what is the appropriate treatment?

Reference no: EM132720605

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