We generally recommend tracking conversion loans by manually adding batches on the transaction screen. Ftwilliam.com does not suggest attempting to set up the loan the loan module, as it is very difficult to recreate a prior record keeper's amortization schedule.
To add conversion loan balances you'll first need to ensure you have a loan investment accountID created for the activity to be tied to. To add the beginning balance of the loan go to the Transactions page and either edit the already existing BegBal batch or create a new one using the Create Beginning Balance link. In the BegBal batch you will enter the loan balances by source ensuring the loan investment accountID is used.
Loan repayments are captured using a LoanRepay transaction batch type. This batch should net $0 as this is only to show the movement of money. There will be a transaction line showing a negative amount leaving the loan investment account and a corresponding transaction line showing a positive amount being deposited into the non-loan investment account. Loan interest will be captured using an Earn transaction batch type.