Hello, Steve Bray.
You can use Cheque or Expense to record the refund then link it to the customer’s unapplied payment to zero out the Accounts Receivable.
When creating a cheque, make sure to select Debtors under CATEGORY then enter the overpayment (refund) under AMOUNT.
For steps on how to apply cheque on the unapplied payment, please refer to If Refund Types 2, 3 or were used section in this article: https://quickbooks.intuit.com/community/Payments/Apply-a-credit-memo-credit-or-refund-to-a-customer/....
Please always consider posting here anytime you need help with QuickBooks.
