How do you manage personal "receivables"?

[Mike or Penny Novack]

>
>Just wondering how you guys manage temporary (and extremely short term)
>loans by friends?
>
>What I did was to create an Accounts Receivable and Account Payables
>account.
>
>If my friend borrows money from me, I'll count it as an expense and place
>the entry in accounts receivable. Then when they pay me back, I split the AR
>transaction and enter as income the amount payed back. But I'm not sure if
>this is the correct way... because the date that the money is payed back is
>no longer accurate (because I'm editing an old transaction). However, if I
>do it separately, it can be confusing which receivable is payed and which
>receivable isn't.
>
>What's the recommended way to do this?
>  
>
A loan (made) is not an expense unless/until it is written off as a bad 
debt.

The transaction when you make this loan to your friend is a transfer 
between two asset account. The money leaves your current account 
(example, bank account) and enters "loan" account (loans owed to you ) 
which you probably have to create for this purpose -- under "assets". 
Later, if your friend pays you back, a transaction in the other direction.

If at some time in the future the loan remains unpaid and you have given 
up hope, THEN you create a transaction canceling the loan into a "bad 
debts" account under expenses.

Michael