How do i transfer debt owed from one vendor to another?

1 - Enter a Bill Credit for the vendor you no longer owe money.  Use some sort of adjustment/misc account and add a memo to the transaction describing the case.

2 - Enter a Bill for the vendor that got paid by the vendor in step #1.  Use the same account so the net amount for the account between the two transactions is 0.00.

Hi,

I already created a vendor account for the new vendor and entered an opening balance, which is the remaining balance after a few payments we made.. If I create a bill it will just add to the balance. I can't adjust the balance either. Otherwise i would just make it zero and then create a bill. Im thinking maybe I just do a credit to the original vendor like you suggested and then write checks instead of creating a bill in the other vendor account.

RE: If I create a bill it will just add to the balance.

That seems correct: If a vendor pays your balance to another vendor, you owe the paying vendor more money.

If you already included the amount you owe the first vendor when you set them up, then use whatever account you used to establish the vendor balance on the bill credit for the vendor who got paid.

Yes that works beautifully. Thanks so much!