Purchase of Asset with Down Payment and Deferred Payments

[TiredAccountant]

We have this planned property acquisition and the agreement terms are as follows:

>Total consideration is 1 Billion
>Out of the 1 Billion consideration, 200 million will be paid immediately upon execution of agreement as earnest money
>Balance will be paid within one year, if not paid within one year, another 200 million will be added to the balance to be paid (New consideration will now be 1.2 Billion)
>After paying the earnest money, the seller will allow us to use the said property as lessee.
>Rental will be 1million per month (for 24 months) but as per agreement, this already forms part of the 200 million earnest money

How should we account this transaction?

[Marek Muc]

why do you mention 'rental' if you buy this property? Owners don't pay rentals...

what is the commercial substance of increasing the payment by 20% if not settled after 1 year? what are the payment terms of the additional 200m?