[GNC] Accounting of loan intended to be paid at the later date by non financial assets

[Paras Desai]

Hello All,

I have a user case for which I seek advice for both accounting principle point of view as well for posting in GNUCASH.

I receive a loan of say Rs. 1 million in current day. With the condition that it will be paid back by non financial asset at the end of the 12  months, by way of say Rs. 1.15 million worth of gold jwelery. (valuation of jaellery comprises of cost of gold and cost of making and designing jewellery)

What would  be accounting treatment for this transaction, as an accounting principle and in gnucash.

I am thinking following in principle...

Dr bank (assets) :  1 million
Cr lender (liability) : 1 million

Cr lender ( liability) : 0.15 mill (interest)
Dr interest expense : 0.15 milllion

Dr  gold purchase (assets) : 0.95 mill
Dr jewelery mfg expense ; 0.05 mill
Cr bank (assets) : 1 mill

Cr Sale (to lender) : 1.15 million
Dr creditor (lender) : 1.15 million

Cr jewellery ( assets) :  1 million (0.95 mill gold cost plus 0.05 mill manufacturing cost)
Dr COGS (expense) : 1 million

Is there any better way for accounting!



A help will be very much appreciated

Thanks
Paras