Hello @Accounting Dad,
Let me help share information about how you can enter a vendor credit with an outstanding balance for both A/R and A/P accounts depending on the version of your QuickBooks. But please be informed that this entry requires creating a journal so I highly recommend contacting your accountant for professional assistance.
To start with, if you're using QuickBooks Desktop, you can creating a clearing account to transfer the amount from your A/R or A/P accounts. Let me show you how.
- Go to Lists.
- Select Chart of Accounts.
- Under Account, select New.
- On the Add new account window, select Bank.
- Enter the name of your new account. Say Clearing or Wash Account.
- Click Save & Close.
Once done, you'll need to create a journal entry to transfer the vendor credit you need to record. Learn more about your clearing account with this article: Set up a clearing account.
But if you're using the QuickBooks Online version, you go ahead and create a journal entry to transfer the vendor credit from your A/R or A/P accounts. You can read this article to learn more about how you can create a journal entry: Create a journal entry in QuickBooks Online.
Additionally, you can also browse for the links in the Community Help page so you be guided with the steps in recording a transaction. I've got you the links below fo easy navigation:
If there's anything else that I can help you with, please let me know in the comments below. I'll be here to lend a hand. Stay safe!