How to enter a credit for a negotiated payment?

Hi there, christine.

You can issue a vendor credit of $33,841.52 to adjust the original bill and reflect the negotiated settlement. I'll guide you through the complete steps.

1. Go to the +New button.
2. Select Vendor Credit under the Vendors column.
3. Choose the item and enter the correct amount. 
4. Click Save and close. 
   

Once done, you can proceed with these steps write off bad debt.

Step 1. Create a bad debt expense account. 

1. Go to the Transactions menu.
2. Select Chart of Accounts.
3. From the Detail Type ▼ dropdown, select Bad debts.
4. In the Name field, enter “Bad debts.”
5. Select Save and Close.

Step 2: Create bad debt item.

1. Go to Sales and select Product & Services.
2. At the upper right, select New, and then Non-inventory.
3. In the Name field, enter Bad debts.
4. From the Income account ▼ dropdown, select Bad debts.
5. Select Save and Close.

Create credit memo and use the bad debt item you created. 

Step 4: Apply the credit memo to invoice. 

1. Select + New.
2. Under Customers, select Receive payment.
3. From the Customer ▼ dropdown, select the appropriate customer.
4. From the Outstanding Transactions section, select the invoice.
5. From the Credits section, select the credit memo.
6. Select Save and Close.
7. The uncollectible receivable now appears on your Profit and Loss report under the Bad Debts expense account.

Please let me know if you have other concerns about recording transactions in QuickBooks Online. I'm always here to help you anytime.