My vendor distributes my debt between my customer and me.

US QuickBooks Pro for Windows : 2007

My vendor distributes my debt between my customer and me.
1. I have a customer (instance:"Casa Gonzales") in account receivable that he owes me $500.00.
2. I have a vendor (Instance:"OAK") in account payable that me owes him $1000.00.
3. When I am going to pay to me vendor. He give me a new invoice, and it say the following:
* Your new balance is $500.00.
* The rest will be paid to the customer's account (Casa Gonzales) $500.00.
* Then after that "Casa Gonzales" balance will be zero ($0.00).
The question is:
1. How could I distribute the payments so much for my vendor, and my customer?.
* Me to vendor.
* Customer to me or me to customer.
* Vendor to customer or customer to vendor.
2. What account would I apply so much for my vendor, and my customer?.
Thank in advance

Basically, what you have is a barter situation and you need a "barter" bank account or clearing account if that is what you want to call it. You want to us vendor to pay customer etc.

This is how you do it step by step: (your version is different from mine so you might have some differences.)

Set up a barter bank account in your chart of accounts with a zero balance.

Next create your invoice for $1000 to customer B.

Next set up this customer B as a vendor and call him Customer B-V (since you can't have a customer and a vendor with identical names.)

Next enter the bill from Customer B-V via the "enter bills" window for $500.

Next go to receive payments and call up the Customer B invoice. Receive his check for $500 as usual. That will leave you a balance due of $500.

Now, go back into receive payments to Customer B and receive the $500 Barter, but, this time go to the bottom left of the screen and change the deposit to: BARTER BANK Account. This will put $500 into your barter bank account.

Now go to your Pay Bills and pay the Customer B-V bill for $500 - but, instead of paying it from your regular checking account go to the bottom of the screen and select "Barter Bank account". This will pay the bill and return your barter bank account to a zero balance.

That will clear your accounts receivable, clear your accounts payable and give you a good audit trail.

The barter bank account should always end up with a zero balance. Now that you have it set up you can use it whenever a customer wants to pay you via a barter arrangement following the steps I have outlined above.

Just be sure the next time you receive a payment or go to pay a bill after a barter transaction that the receive payment "Deposit to" is changed back to your regular checking account. Quickbooks tends to recall your last transaction and may pull up your barter bank account because that was the one you used last.