I have applied a credit memo but the invoice still shows "open"

"But why did the amount due double when I deleted the credit memo and how do I fix it?"

I cannot see your work, so let's review Basics:

You set up the items typically linked to income, expense or Both; or to Balance sheet, such as Liability for Security deposits and prepayments if you are allowed to carry liability. You use them on Transactions. You Make, do, sell, charge, buy, or buy and sell.

That means the Item on the Invoice or Sales receipt is the Same item you charged. You use Sales Receipt because this date of the sale, you also are already paid. You use Invoice instead, when the date of the Sale is not the same as the date you get the payment. Later, for invoices, you process the Received Payment against the invoice(s) to which it is applied.

Invoices create AR balances = to be paid later.

You use Credit Memo to reverse a sale; like a refund or to address that you overcharged someone. Credit Memo and Payments both are Negative AR = you apply them to invoices, you refund them, or partials for both needs.

Here is where things go wrong: Using Payment items, or using any item type linked to Banking, to AP or to AR; using that on Sales or invoices is not typically the right thing to do.

So, you have negative AR from Overpayment. You also use a credit memo, which creates AR = duplicate data using two different methods. If you also use an item linked to AR, you are using a Third method to affect AR. I don't know if this is what you did, of course; I am simply describing "this is how things get confused."

We let the Transactions do the work for AR activity: Invoice, payments and Credit Memos.

And that means, if you already have negative AR from an overpayment, in the PC desktop program from that same Payment screen, we have an icon to Issue the refund. If you don't, then you would generate that transaction manually, as we can also do, by using AR on the check to refund them, for their name. You then use the Receive Payment screen for that name with an amount as 0, to apply the payment to the refund, to Close them (stops them from being treated as Still Available and Open).

Glad to help.

Are you using this website for reference:

www.qblittlesquare.com

"I haven't found a better way to credit a QB invoice when a customer pays this way,"

You use Receive Payment, the same as always. You would be tracking your PayPal account as a Bank type, if they paid to your PP account. If they paid Through their PP to your Bank, you would let this post to your Checking account, directly.

If you have a PP account and they paid to your account, you need to be managing this as if that is a Real Bank, because it is a real bank = they have your funds, you get statements, you Reconcile that account, and you Transfer money to/from PayPal and from/to Checking.

The transfer from PP to checking is not income, again.

"so I created a credit memo for the amount of the invoice and applied the existing credit to it."

The problem here is that what you used on the Credit Memo is flowing the data to your accounting, and you just Reversed that sale. Credit Memo = Reversal of the Invoice.