[GNC] Convert loan to downpayment

[Patrick James]

This is clearly an accounting question more than a GnuCash question.

Always consult with an accounting professional if it could make a difference in your future.

One approach might be the historic costing principle suggests that you won't record the $120k until you sell.

Another approach, and this one is very questionable, would be that he paid you back $720k when he only owed $600k. No rational person would do this.

This reminds me of people who get "large" valuations on their old cars when buying a new one. The value of the old junk is increased by $120k and price of the new car is increased by $120k.


> On 03/31/2026 4:08 PM PDT Fred Tydeman <tydeman.fred at gmail.com> wrote:
> 
>  
> In a foreign country, I had loaned a developer 600K of their currency.
> He had been making interest only payments for some time.
> He paid off the 600K loan by converting it into a 720K downpayment on
> the loan (I now have from him) to buy an apartment he will build for me.
> What is the 120K difference?  How do I record it?
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