Hi @francesca-procto
To record the initial loan, you will need to have set up a Loan Account in advance.
Someone may correct me on this but I think it should be classified as a Current Asset.
There's a Loans to Others subcategory that should be fine for this.
Make the loan as a Cheque (enter BACS in the number field if you paid electronically).
Category for the loan is the Loan Account you created earlier.
Use No VAT code.
The loan is now on your books as an asset. (sounds wrong but it isn't)
When the client pays back use Bank Deposit to log the payment(s).
Again, category is the Loan Account & use No VAT code.
If you view the Loan Account in Chart of Accounts you will see it decreasing as the loan is paid off.
Hope this helps.
