Good day, Bluewaterbookkeeping66.

Let me walk you through in the Desktop version.

First, we'll have to create a clearing account. Here's how:

1. Click Lists, then go to Chart of Accounts.
2. Click Account, then choose New.
3. Choose Bank, then click Continue.
4. Enter a desired name (example: clearing account).
5. Click Save & Close.

Next, create a journal entry. Here's how:

1. Click Accountant, then go to Make General Journal Entries.
2. In the Account field, choose Creditors.
3. Enter the amount in the Debit field, then choose the supplier in the Name field.
4. In the next row, choose the clearing account you've created in the Account field. 
5. Enter the amount in the Credit field, then choose the supplier in the Name field.
6. Click Save & Close.

Then, here's how to apply the entry to the existing balance:

1. Click Vendors/Suppliers, then go to Vendor Center/Supplier Center.
2. Choose the supplier, then look for the bill.
3. Open the bill, then click Pay Bill.
4. Click Set Credits, then you'll find the journal entry in the Credits tab.
5. Choose it, then click Done.
6. Click Pay Selected Bills.

Follow the steps for clearing out the A/R amount using the same clearing account. 

As always, we recommend consulting with your accountant on the best way to handle this.

Feel free to reach out to us. While we can't provide an accounting advice, we want to make sure any technical questions you have about the system are answered.