Hi, MDTerp66.
You'll need to create an item and income account to track bank's NSF check charge. Afterwards, create a Bad Check Charge item and set the Account Type to Other Charge.
Once done, create a journal entry to reverse the original payment. Here's how:
- Go to the Company menu, and select Make General Journal Entries.
- In the General Entries window, Debit your Accounts Receivable for the same amount of the NSF check charge.
- Enter a note in the Memo column to indicate the transaction.
- Under the Name column, select the name of the customer.
- Credit the checking or bank account that received the original deposit.
- Select Save and close.
Now, convert the payment for the invoice to the reversing journal entry. The amount of the NSF charge will reduce your bank account. Here's how:
- Go to the Reports menu, and select Customers Receivable.
- Choose Customer Balance Detail.
- Double-click the original payment for the NSF transaction.
- Move the check mark from the reversing journal entry.
- Select Save and close.
Please let me know how these steps work. I'll be right here if you have follow-up questions.
