No-interest loan (donor)

[Mike or Penny Novack]

>I've granted two friends three separate loans, all w/o interest, and I'm
>not sure how to best represent this in GC.  The money came from
>Assets:Checking but do I put it in a special Expenses:LoanToSoAndSo?  Or
>somewhere more suitable?  That's the best I can come up with.. am I
>doing the right thing?
>
>With regards,
>Tom Howell-Cintron
>  
>
How best to do this depends on the purpose for which you are keeping books.

a) As long as you consider these expenditures to be "loans" then in no 
case would they be expenses. The other side of the transaction would be 
ASSET type accounts and you might have a structure like:
ASSETS
    LOANS OWED TO ME
       LOAN TO A
       LOAN TO B
       LOAN TO C
   In other words, when you make that loan the transaction is simply 
between the asset current cash and one of these.

b) At some time in the future when you decide you need to write off any 
amounts that were never repaid you can close the account to an account 
under EXPENSES for BAD DEBT or GIFTS (if these are personal loans, 
forgiving of them is considered a gift).

Michael