How to restrict access to nested class member to enclosing class?

Make JournalEntry a private nested type. Any public members will be visible only to the enclosing type.

public class Journal
{
    private class JournalEntry
    {
    }
}

If you need to make JournalEntry objects available to other classes, expose them via a public interface:

public interface IJournalEntry
{
}

public class Journal
{
    public IEnumerable<IJournalEntry> Entries
    {
        get { ... }
    }

    private class JournalEntry : IJournalEntry
    {
    }
}

Actually there is a complete and simple solution to this problem that doesn't involve modifying the client code or creating an interface.

This solution is actually faster than the interface-based solution for most cases, and easier to code.

public class Journal
{
  private static Func<object, JournalEntry> _newJournalEntry;

  public class JournalEntry
  {
    static JournalEntry()
    {
      _newJournalEntry = value => new JournalEntry(value);
    }
    private JournalEntry(object value)
    {
      ...

If your class is not too complex, you could either use an interface which is publicly visible and make the actual implementing class private, or you could make a protected constructor for the JornalEntry class and have a private class JornalEntryInstance derived from JornalEntry with a public constructor which is actually instantiated by your Journal.

public class Journal
{
    public class JournalEntry
    {
        protected JournalEntry(object value)
        {
            this.Timestamp = DateTime.Now;
            this.Value = value;
        }

        public DateTime Timestamp { get; private set; }
        public object Value { get; private set; }
    }

    private class JournalEntryInstance: JournalEntry
    { 
        public JournalEntryInstance(object value): base(value)
        { }
    }
    JournalEntry CreateEntry(object value)
    {
        return new JournalEntryInstance(value);
    }
}

If your actual class is too complex to do either of that and you can get away with the constructor being not completely invisible, you can make the constructor internal so it is only visible in the assembly.

If that too is infeasible, you can always make the constructor private and use reflection to call it from your journal class:

typeof(object).GetConstructor(new Type[] { }).Invoke(new Object[] { value });

Now that I think about it, another possibility would use a private delegate in the containing class which is set from the inner class

public class Journal
{
    private static Func<object, JournalEntry> EntryFactory;
    public class JournalEntry
    {
        internal static void Initialize()
        {
            Journal.EntryFactory = CreateEntry;
        }
        private static JournalEntry CreateEntry(object value)
        {
            return new JournalEntry(value);
        }
        private JournalEntry(object value)
        {
            this.Timestamp = DateTime.Now;
            this.Value = value;
        }

        public DateTime Timestamp { get; private set; }
        public object Value { get; private set; }
    }

    static Journal()
    {
        JournalEntry.Initialize();
    }
        
    static JournalEntry CreateEntry(object value)
    {
        return EntryFactory(value);
    }
}

This should give you your desired visibility levels without needing to resort on slow reflection or introducing additional classes / interfaces