The FV of the loan is the discounted receivable using market rates, the difference between the PV (say $8m) and the $10m should be deferred and amortized over the term of the loan on the same basis as the accretion.
The free interest is an additional cost to the company. However, this difference is not a transaction cost (e.g., costs paid to the broker, legal costs, commissions) as defined under IFRS (more closely mirrors premiums/discounts, financing costs or holding costs) and therefore should not be expensed immediately but should rather be deferred and amortized on the same basis as the amount that is being accreted.
On the financials you would present the long term loan receivable on a discounted basis and would also show a deferred charge that is amortized on the same basis.
Don’t adjust for any changes in market interest rate as this should be accounted for using the amortized cost method.