Loan Offset, Accrued Interest in Pooled Profit Sharing Plan

I've seen all sorts of different rules and such regarding accrued participant loan interest, so I just want to see if my interpretation is correct in the situation below:

Profit Sharing Plan is pooled, so it not a directed investment of the participant.

Participant has an account balance of $50,000.

Participant has an outstanding loan of $10,000, terminates employment and accrues $500 of loan interest by the time he elects to rollover his entire account balance.

Would this be correct:

Taxable offset distribution of $10,500, consisting of loan balance plus accrued interest.

Rollover would be for $39,500 -- $50,000 less the $10,500.

Thanks!

If the loan to the participant is an investment held by the trust (i.e., not an investment earmarked as being held specifically in the participant's account), then the loan's promissory note will specify what happens should the participant terminate employment or otherwise default on the loan.  The worst case scenario is if there is no recourse by the trust in the event of a default of the loan, in which case everyone in the plan shares in the loss due to the default and the participant gets their entire vested account balance.  Be careful when a pooled trust is "investing" in loans to participants.