In microsoft.public.money, Paul. wrote:

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There is more than one way, but I would probably not set it up as a
loan. Instead I would create an Asset account named "Loan to Cafe
Marie". Transfer the principal to that account.

For interest you could either create a unique category
(InterestReceived:CafeMarie) and enter it as a payment into your
checking account. Alternatively you could enter some
InterestReceived category payment into "Loan to Cafe Marie" and then
add a second transaction to transfer that money to your checking. A
variation would be to have time between those two transactions for
when you accrue interest, but don't actually receive the cash yet.

The balance of the account would represent the amount outstanding.
Either way should let you customize a report for the payments, and
the category should be set up to get the interest to the right place
for your taxes. Check with your accountant to see how this should
work taxwise. If you are not generally in the loan business, this
would be handled differently than if you were.

I'm looking for advice on how to set up a loan in MS Money 2007 Home &
Business. This is an on demand loan (a loan which is repayable on
demand, rather than on a specific date) to a relative with a fixed
interest rate but no periodic payments or end date. Hopefully I will
get ocassional payments of interest only but those will be sporatic
until her business takes off.

As interest payments come in I would like to record them as interest
earned but still not touch the principle until that starts getting
paid off. The traditional loan setup in Money doesn't quite fit the
situation. I guess it is more like an asset (IOU) but I would like to
be able to track interest payment history.

Your recommendations are appreciated.

Paul.