Hi there, @rhea3.
Let me share with you more info on how to use vendor credits in QuickBooks Online (QBO).
Once you create this transaction in QBO, you can use it to either record returns to your vendors or refunds from vendors. If a vendor issues you a credit, you can apply that credit manually in the Credit Applied column in Online Bill Pay.
What you've done is correct. However, since you've entered different accounts to a single bill, this will automatically be recorded as a split transaction. This is the reason why your account entries on the bill are divided.
In addition, you don't have to create a check to clear the bill if a vendor credit was already applied to it. Doing this will record another expense transaction in QuickBooks.
In case you want to unrecord this check, you can simply delete it.
To know more about when to use bills, bill payments, expenses, or checks in QBO, you can check out this article: What is the difference between bills, checks, and expenses?
Please let me know if there's anything else I can do to be of assistance. Just place your concern by clicking Reply and I'll get back to you. Wishing you and your business continued success in all that you do.
