I need to transfer a credit balance from one customer's account to another customer's account. The answer to my question was to do journal entry where both Debit & Credit are posted to AR with the names of the customer accounts in the name drop down. QB will not let me save this entry saying you cannot use more than 1 AR or AP account in the same transaction. So how do I do this?
That is correct, QB does not allow us to shuffle value from one a/r or a/p to another
Journal entries should be the exception when using QB, they often do not work as you think they should, and when you use inventory type items they never work for inventory. It is much better to use the forms on the home page the way QB is designed to be used. Journal entries also bypass accrual/cash reporting, and will not show on many reports.
create a liability account called clearing
create an other charge item called move-credit and select the clearing account on the item screen
create an invoice for the main customer in that amount and use the move-credit item
in receive payments click the invoice and apply the credit
create a credit memo for the job, use the move-credit item and the amount
in receive payments apply the credit to the job