I paid the wrong vendor. The vendor returned the funds less banking fees and an outstanding invoice. How do I enter the transaction in Quickbooks.
I have not done this is QBO. But, here's how to fix is Desktop. First of all,. what account did you pay the first vendor out of? If you just paid it out of the checking account to the expense account, then the deposit would go back against the expense account. If you used the pay bill option, the you would make the deposit to the A/P account listing that vendor. That wrong vendor should have a credit if their account if there are no outstanding bills.
When you record the deposit, use the original amount going to either the expense account, or the A/P account depending on how you originally wrote the first check. Then pay the correct vendor.
If you used the pay bills option, then pay bills, find the wrong vendor and apply the credit, if you paid directly to the expense account, then this step is not needed. If the fee was $1 and your check payment was for $100, then you would record the deposit as $100 to A/P or expense account and -$1.00 to fees.