Journal Entry appearing in Pay Bills screen

Thanks for visiting the QuickBooks Community, @marthaw,

I can help you resolve this billing question in QuickBooks.

Creating a journal entry crediting Accounts Payable will increase the liability balance. Even if you make a reversal, this entry will show as outstanding balance because we can't apply a payment towards a JE.

To resolve this, you will need to delete the journal for September and recreate it as a bill. A bill works similarly as creating a JE, hence, its transaction journal credits A/P and debits the bank.

To delete a journal entry, click the Delete button at the top.

Once done, create a bill dated for September using the Vendors tab and selecting Enter Bills. See this:

When you're done, link the journal entry payment for October by clicking the Pay Bill option at the top of the bill.

To use the journal entry as payment, click on Set Credits. Mark the JE for October under Credits tab. Once you're done, press Pay Selected Bills. See this:

After doing these steps, your A/P balance should be all set. For your guide with handling bills, see this resource guide: Pay bills in QuickBooks Desktop - Intuit

Let me know if you have follow-up questions about this topic. I'll be more than happy to share some more information about the tasks in QuickBooks. Have a nice day!

I'm actually working on this in QuickBooks Desktop. Do I follow a similar procedure?

Let me get you back on track, @marthaw.

Yes, the same concept or rules apply. However, I've got another set of steps to follow for QuickBooks Desktop.

To start, let's delete the journal entry you've created for September. Let me guide you how:

1. Go to the Company menu at the top.
2. Choose Make General Journal Entries, and then select the Main tab.
3. Click the left or right arrows to locate the Journal Entry (JE) you'd like to delete. Alternatively, you can use the Find button to locate your JE easily.
4. Select Delete General Journal from the Edit menu or press Ctrl + D on your keyboard.
5. Click Save and Close to exit.
   

After that, you can now create a bill dated for September as you normally would.

Then, pay your bills and apply the JE you've created for October to write off the amount dues. Here's how:

1. Go to the Vendors menu, and then select Pay Bills.
2. Choose the said bill, and then click the Set Credits button.
3. Select the JE amount, and then Done.
4. Click Save and Close.
   

To keep track of your outstanding bills, you can run the Unpaid Bills Detail report. To achieve this, go to the Reports menu, and then select the said report from the Vendor & Payables section.

I've got your back if you have more questions about managing your bills or transactions in QuickBooks. Have a good one.