I need to issue on account credit for a client that we will be paying with our product, meaning they provided a service to us in return we will issue a sales credit. When issuing this credit I did a gift certificate of 7000.00 but in balance sheet reflect as negative. Is this correct?
I credit AR and debit gift certificate on the balance sheet.
You're on the right track in recording the gift certificate to your client. In the balance sheet report, when you issue a credit, it set towards the existing balance on a buyer's account to reduce the total.
The credit will result in the following entry in accounting records. In other words, the credit memo reduced Seller's net sales and its accounts receivable.
As I replicated what you have worked on, I have this screenshot shows the negative amount in the Balance Sheet.