"Is there anyway to do a journal entry to fix this without affecting the income?"

Never use a JE for AR. You can do what you need on a Credit Memo or Invoice, and you use the ITEM there that meets your need.

"There is only one problem with that. It is going to overstate our actual income for this month / year by creating an invoice like that."

This person left Funds on hand = negative AR. That is income to you. Their Credit Memo already reduced Income that year, or by whatever account their Item is linked to. That is why I suggested using that Same Item on your invoice.

Run all of this past your CPA. You can control this by which Item you put on the invoices. Don't use JE for AR, AP, Sales Taxes, Inventory or QB Payroll.