We suggest two methods.

Method 1: Create a new account and call it "Friend". Record a transfer from your own account to this account - this will show initial loan amount. When your friend pays money back, record every payment as a transfer from the account "Friend" to your own account. You don't even need to generate a report to see how much he owes you: "Friend" account balance shows the amount.

Method 2: Create a category "Loan:Friend". Record a withdrawal using this category - it will show initial loan amount. When your friend pays money back, record every payment as deposit to any account using the same category ("Loan:Friend"). In this case you need to generate category spending report to see how much your friend owes you.