You can do this with one transaction, a zero Sales Receipt. On the first line enter the Item being transferred as a negative qty and on the 2nd line enter the Item received as a positive qty, both with a sales price of zero.
You can use inventory Categories to name the locations, and have the items under the Category. You will have to set up different Items for the same product:
Location1:Item1
Location2:Item1
Not sure if you can repeat "Item1"
