I am using GarageBand 5.1, but this should work with newer versions.
I recently put together a simple Garageband electric guitar setup. Here are the steps that I took to use the audio input jack.
Required Materials:
Guitar
1/4" to 1/8" cable (Adapter acceptable)
Macbook
Headphones or External Speaker
First, plug in the headphones or external speakers. This will prevent any unwanted audio feedback, which could damage your macbook.
Next, open system preferences and navigate to the Sound preference pane. Command+Space "Sound" should get you there.
1.) Click the input tab and you should see two options: Internal Microphone and Line In. Click Line In.
2.) Plug your guitar into the audio line in jack on your Macbook. You should see the Input Level jump when you plug in your guitar. Strum normally and adjust the input level. I turned it all the way up for my acoustic-electric guitar, but if you have an electric guitar with good pickups, you may have to turn it down.
3.) Open GarageBand and select "New Project" subcategory "Electric Guitar".
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This is the extent of the information that I was able to aquire through Apple GarageBand documentation. Everything that follows is either third-party or trial and error.
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4.) Open GarageBand system preferences (Command+ , ). Open the second tab labeled "Audio/MIDI".
The first two settings are "Audio Output:" and "Audio Input:".
Changing both of these options manually to "Built-In Output" and "Built-In Input" guarantees that you will be able to record and modify audio from your guitar and hear it live. Clicking "Optimize for Minimum Delay" is useful if you want to hear your guitar with effects with minimum lag.
I have experimented with changing these settings with limited success. If you learn anything new please contact me on my profile.
An Apple a Day...
Doctah Wilson