Audacity Forum

This big damn good piece of software only lacks this feature in my opinion prior to recording-tools perfection.

When you have to record a song-writer who sings and plays guitar at the same time you can't record both instruments (voice and guitar) onto different tracks.
You can only record one at the time or combine them into a wrongly built stereo track.. not good!

Is this issue a known one? I figured it out only recently and I had no clue how to fix it.. now I know that is not possible

It depends on your hardware.
If your hardware allows you to connect the guitar to one channel and the microphone to the other, then you can record that as a stereo track, then after recording you can split it into two mono tracks (one for vocal and the other for guitar). See here for splitting tracks: http://manual.audacityteam.org/o/man/sp ... racks.html

Of course you are likely to get some "spill-over" from the guitar being picked up (acoustically) by the microphone, but if you "close mic" the vocal you should be able to achieve a useful amount of separation.