1. Set up the Loan as an asset.
2. Realise that money into a separate cash account. (Called something like 'Loans due to the estate').
3. Use the interim distribution function to enter a distribution against the relevant beneficiary equal to the amount of the loan to be repaid and in the narrative words could be used such as “ Paid to the executors to repay outstanding loan”. The Loan cash account will be debited.