Thank you for the response and "translation" to Desktop.  How exactly do you "Choose the AP account used on the deposit."?  It only allows me to select a bill, of which there are none for this vendor.  Without selecting a "bill" to pay the "Set Credits" button is grayed out and unavailable for use.  I can select different banking accounts in the Payments section but that is already defaulted to our Operations Account.  Do I need to create a zero bill to clear this out?   Please advise.

For the first part here's the info on the Deposit: 
Deposit to: Operations Account
Received From: Vendor Name

From Account: Proper Expense Account ie: Payroll
Memo, Check #, Pmt Method: Blank

Amount: $xxx.xx

Cash Back To fields are all blank.

Sorry for the confusion and thank you for the help.