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vendor payment

Forum|Forum|1 year ago
August 13, 2024
1 reply
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I received a refund from the insurance for $361.97 on 06-06-24 for a payment that should not have been made and had already been reconciled. Therefore, I made a journal entry: Dr. Bank $361.97 / Cr. A/P $361.97 so that it would appear again in my vendor account as a debt, increasing my payable amount for the vendor.

Subsequently, a payment of $336.97 was made, which needed to be applied to that journal entry. When I made the payment, I wrote a check and applied it to the journal entry of $361.97. It was applied, but when I checked the journal entry in the vendor account, it still shows the entire amount of $361.97 as an open balance. I don't understand why the amount wasn't reduced, as I applied the $336.97 check to this journal entry.

I would greatly appreciate it if someone could please help me.

QuickBooks Desktop

Best answer by FishingForAnswers

@Luna1383 I am not clear on why you used A/P in the Journal Entry (JE). If they gave you a refund for a payment you did not owe them, there seems to be no reason to re-assume a debt to them.

Using the relevant Insurance Expense in place of the A/P account in the JE would have sufficed.

If you owed $336.97 to them, a bill should have been created for said $336.97 payment to be applied to.

Maybe I'm missing something, though.

FishingForAnswersAnswer

Level 4

@Luna1383 I am not clear on why you used A/P in the Journal Entry (JE). If they gave you a refund for a payment you did not owe them, there seems to be no reason to re-assume a debt to them.

Using the relevant Insurance Expense in place of the A/P account in the JE would have sufficed.

If you owed $336.97 to them, a bill should have been created for said $336.97 payment to be applied to.

Maybe I'm missing something, though.

L

Luna1383Author

I'm sorry, maybe I didn't explain myself well. Initially, an invoice for this expense was created for the total amount of the insurance, $5,493, and monthly payments are being made. A payment of $361.97 was made on 05-18-24, and subsequently, we received a refund of this amount on 06-06-24. Since the payment made in May had already been reconciled...I made a journal entry for this refund received: Dr. Bank $361.97 / Cr. A/P $361.97 so that it would appear again in my vendor account as a debt, increasing my payable amount for the vendor.

Subsequently, a new payment of $336.97 was made on 06-11-24, which needed to be applied to that journal entry. When I made the payment, I wrote a check and applied it to the journal entry of $361.97. It was applied, but when I checked the journal entry in the vendor account, it still shows the entire amount of $361.97 as an open balance. I don't understand why the amount wasn't reduced, as I applied the $336.97 payment to this journal entry. Currently, the original invoice has an outstanding balance of $1,355.63 due to the payments already made to this invoice. Including the journal entry I made for $361.97, the debt increases to $1,717.60.

BigRedConsulting

Level 15

RE: It [a bill payment check] was applied [to the journal], but when I checked the journal entry in the vendor account, it still shows the entire amount of $361.97 as an open balance. I don't understand why the amount wasn't reduced, as I applied the $336.97 payment to this journal entry.

It's probably just the way Journals are represented in that view on the Vendor record's history. Generally Journals aren't A/P transactions or thought of as being 'payable' or as paying bills.

This is a reason to use Bill Credits when you get a vendor credit instead of Journals, as @FishingForAnswers suggested.

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