Accounting question: loans to someone else

[Beth Leonard]

Hi,

I'm sure an accountant would think the answer to this is simple, but 
I can't figure it out.  How does one account for a loan given to
someone else?

So far when I deposit the checks, I've just been using
"income:loan repayment" and I have an asset account for the loan
which was originally a transfer from checking.  However, I know
the loan asset is decreasing over time, one day it will be
all paid off and will no longer be an asset that I can expect
income from.

Here's the variables to work with: 
Loan Amount (how much I gave them to begin with)
Total Loan Repayment (how much I will get back eventually)
Yearly Payment (money they pay to me each year)

Clearly the Loan Amount comes from Checking, and the Yearly Payment
goes to checking, but I'm having trouble figuring out how and where
to put the interest, to cover the fact that the total amount repaid
is more than the amount borrowed.  I don't mind doing calculations
by hand for the amounts, but what are the transfer accounts?

If the interest rate is fixed, how do I calculate the book value of
the loan if I were to "sell" the right to receive future payments
to someone else?  Actually, that's not quite the question I want
to ask because I know I can calculate that.  What I really want to
know is how can I make regular transactions such that in my
balance sheet under Assets, the "sell value" is reflected in
the balance sheet, not the original value of the loan.

Thanks,
--Beth
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+                             Beth Leonard                          +
+       O say, does that star-spangled banner yet wave              +
+       O'er the land of the free and the home of the brave?        +
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