How to make Loan Given Entry

Loan given to your friend

Create account under loans n advances
Then create an expense transaction under Transactions > Expense > Create

Paid from : Cash/Bank
Paid to : Friends Loan’s A/c

To calculate interest, Go to Interest Calculation Report under Other Reports
Enter the interest rate and select the account, it will calculate and show you the interest amount calculated.

After calculating the interest, you need to pass a journal entry
Create a journal entry under Transactions > Journal > Create

Friends Loan A/c Debit
Interest A/c (under Direct Income) Credit

When your friend returns you the money

Then create an Income Transactions under Transactions > Income > Create

Received from : Friend’s Loan A/c
Received into : Cash/Bank

Also you can see the Ledger Report of your friend’s account, it will show you that how much amount is still pending and how much amount he paid to you.