Loan Receivable
How to track loans you have made to others, including the outstanding balance and periodic interest revenue.
A Loan Receivable is a type of account receivable where you track all the money owed to you by someone you lent money to, plus the interest revenue generated periodically by the outstanding balance.
In this example, imagine you loan $100 to John at a 10% interest rate.
Setting Up the Accounts
Start by creating an Asset Account to track the outstanding loan balance, and an Incoming Account to track the interest revenue:
Recording the Loan
Record the initial loan amount as a transaction moving resources from your bank to the loan receivable Account:
Recording Interest
Record interest periodically (usually monthly) as it accrues on the outstanding balance:
