I set up a 'Borrowed/Lent' account for recording borrowed money (creditors) and lent money (debtors).
Borrowed amounts are entered as minus figures, because the money isn't mine and should be deducted from my net worth. Lent amounts are entered as plus figures, because the money is mine, even though I haven't received it back yet.
I only reconcile a transaction on this account when it has been repaid, and at that point I enter a second transaction to zero the original transaction.
In order to keep reports accurate, all transactions in this account are entered as TRANSFERS to or from one of my other accounts, NOT deposits or withdrawals; this is because it is only a temporary transfer of funds that will be repaid, not an income or expense. I use the comments box to record the payee details. (The only time I would enter a deposit or withdrawal in this account is if I write off a debt I'm owed, or if a creditor lets me off a debt I owe - but this hasn't happened yet :lol: )