How to book a Federal Reserve Return Item

Thanks for sharing the details with us, @JSTS

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Let's create an expense under Accounts Receivable A/R, then link it to the invoice payment. Doing so will open the invoice as unpaid. Let me guide you how.

In your QuickBooks Online (QBO) account:

1. Go to the (+) Plus icon.
2. Select Expense.
3. Under the Payee drop-down menu, select the name of the customer.
4. Choose an account where the payments will be taken under the Payment account drop-down menu.
5. Select Accounts Receivable (A/R) under the CATEGORY column.
6. Enter $825.00 in the AMOUNT column. 
7. Click Save and Close.

Then: 

1. Go to the Sales menu and select the Customers tab.
2. Locate and open the invoice payment.
3. Mark the Expense transaction to link the expense to the payment.
4. Click Clear Payment. 
5. Then hit Save and new.
6. Click Yes to confirm the changes.

Once done, you'll be able to link the deposited payment to an open invoice. I'd also suggest getting in touch with your accountant if you want more tips on how to better record this.

Also, I'm adding this great article that can guide you on how to reconcile your accounts in QBO: Reconcile an account in QuickBooks Online.

Should you have other concerns in the future, you're always welcome to post here anytime. I'd be happy working with you. Have a great day!