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Since it's 2018, they still have time to exchange cash for this, and fix the situation. Pay for the asset. Get paid in return for the "barter" work. All the paperwork is right. Reporting is straightforward. All the "how did you decide on the value of the barter work?" questions are made moot.

I get what you are saying, Edsel. But I would report the income and set up the asset because I would almost bet that any expenses associated with earning that $2,700 of income are going to be reported - such as parts used, or any labor, or overhead.

I will make one further observation and then I will shut up. Some states or local municipalities have a gross income tax. The $2700 would need to be reported for that purpose.

Real world answer. RFassett is correct in everything said. But I might suggest a solution which is harmless. Leave the $500 expensed as rent for the prior year. Do not enter revenue or set up a fixed asset for $2700. As far as the current year, do not record anything. For $3200, this is not worth the scrutiny even if detected by the IRS. My solution would be different if the asset had a value of $20,000. Understand this is not a "pure" suggestion, and this post could be met with criticism.

Are you picking up the $2,700 as income? You can not have it both ways, i.e., take a deduction and not include the income used to generate that deduction. Without the income, you have no basis. That is where you need to start with this. After that, if it was truly a rent with option to buy, the option was exercised in 2018 and you would put the $2,700 on the depreciation schedule for 2018.