A contractor provided incorrect bank details so their direct deposit was refunded. How should I record the original payment, refund and reissued DD in chart of accounts?

I can see how hard you tried here, Treasurer. No worries, I'm here to ensure you'll be able to record it correctly.

If a contractor's direct deposit payment in QuickBooks Online (QBO) gets returned, you need to create a journal entry to void it. This will ensure that the funds are posted back to your bank account. Once the funds are back in your account, you can either resend the direct deposit payment or issue a paper check to your contractor. However, I recommend contacting your accountant, as they can determine best which accounts should be affected. 

Allow me to walk you through on how to make a Journal entry:

1. Click + New.
2. Select Journal entry.
3. On the first line, select an account from the Account field.
4. On the following line, select the other account you're moving money to or from. 
5. Cross-check the amounts in the Credit and Debit columns to ensure that the accounts are balanced..
6. Enter information in the memo section so you know why you made the journal entry.
7. Select Save and close.

For detailed information, refer to this article: Create journal entries in QuickBooks Online.

I'm also adding this additional reference should you need to run a 1099 report that shows payment totals and more: Create 1099 reports in QuickBooks.

Feel free to visit the Community if you have additional questions about your contractor. We're here to make sure your concerns are well taken care of. Have a nice day.