I have a loan that I setup with a business associate and will be receiving payments that I'd like to split into principal and interest, since the interest is income and the principal is not. How would I set this up in First Edge, and how would I process the payments to get things split into the right accounts?

Once you have received from your accountant the correct accounts to post the principal and interest to, you can go to Banking Module and open the Bank Register. Select Spend Money from the Type of transaction then select the Split button to allocate both the amount to principal and interest.

I don't think I asked my question correctly. I understand that I can use the "receive money" option in the bank register, and then split my transaction into principal and interest. I would setup an income account for the interest... got that. What I'm not sure of is what kind of account I should use for the principal. If it were a loan I was paying into, then I'd set it up as a Long-Term Liability and give it an initial balance that I would pay down over time. But I am extending the loan, so I assume the item would be an asset? If I set it up as an asset with the current principal amount... then the payments coming in should deduct from the amount owed. So how do I make receiving money into an account, deduct the value of the asset... the loan?

You are on the right track.
You made the loan. Lets say you wrote a check. Post that to an asset account (probably as an "accounts receivable") "Loan to John Smith".

Use "Receive Money" for the payments "John Smith" makes to you to and code to an income account for the interest and to the asset account "Loan to John Smith" for the principle. He will have paid off the loan when that asset account zeros out.


Dan