In order to raise capital for my fledgling tea business, I have begun offering "Tea Bills" -- ($1,000 investment, yielding 5% interest at the end of 3 years.) I have "sold" a few to people who know me and know my work & reputation. My question is, how do you account in the books for the investment? In essence, a "Tea Bill" is a loan of $1,000, and as I understand it, a loan is not income and repayment of the capital is not an expense, right? The interest is an expense, being basically the "rental" for the use of the money, right? (And it is an actual loan for a definite timeframe, not like an investment where the investor is getting a piece of the business, complete with risk of loss and/or percentage of the profit.) How do I do the accounting for it?