# Loan Receivable

A Loan Receivable is a type of [account receivable](https://bkper.com/docs/guides/accounting-principles/receivables/accounts-receivable.md) where you track all the money owed to you by someone you lent money to, plus the interest revenue generated periodically by the outstanding balance.

In this example, imagine you loan $100 to John at a 10% interest rate.

## Setting Up the Accounts

Start by creating an **Asset** Account to track the outstanding loan balance, and an **Incoming** Account to track the interest revenue:

## Recording the Loan

Record the initial loan amount as a transaction moving resources from your bank to the loan receivable Account:

## Recording Interest

Record interest periodically (usually monthly) as it accrues on the outstanding balance:

> **Tip**
> To calculate and record interest periodically, you can use the [Bkper Add-on for Google Sheets](https://bkper.com/docs/guides/google-sheets.md).