I would like to set up and investment account showing amount I loaned at X% rate and then show payment to principal and interest each month. I don't really see a way to do this. Am I missing something?
You can definitely do this, but Quicken won't do the automatic calculation of principal and interest for you it it's a loan where the interest decreases and principal payment increases over time.
The loan you have made is an asset, so you'd first create an asset account "Loan to XYZ". Did the money for this loan come out of one of your existing accounts tracked in Quicken, such as a checking or investment account? If so, you would enter a Transfer transaction to move the loan amount from the cash account to the loan account. If not, you can simple enter an opening transaction in the loan account, using the Category=Adjustment, for the amount of the loan (which makes the loan balance appear out of nowhere, neither income nor expense.)
Next, you'd create a Scheduled Transaction to recur each month in your checking account which receives the the monthly payment. That transaction would have two split lines: (1) the interest portion of the payment would use a category like Personal Income:Interest Earned, and (2) a Transfer to the loan account for the principal repayment portion of the payment.
As I said initially, Quicken won't calculate the split between interest and principal on a lender loan, so you'll need to do that manually. There are many websites which will allow you to enter the loan amount, interest rate, and number of months and generate an amortization table which each month's interest & principal you can print. then, each month, or every few months, or once a year, you can refer to the schedule to edit each the monthly transaction's splits to reflect the proper interest income and principal payment — it takes just a few second to adjust each monthly transaction, so it's not a big bother.
Thanks Jacobs, Guess for now I'll have to do it that way:)