Hi Lisa1357,

Thanks for joining us here.  QuickBooks Online offers a variety of ways to record transaction to best suit your business needs.  In addition to the valuable information provided above, it's always best to reach out to your accountant so they can provide their expertise and best course of action.  If you don't have an accountant, we can help you locate a ProAdvisor in your local area.  However, you can create a product or service item for the warranty and then enter it as a credit memo for the amount to be applied to an invoice by following these steps;

Step 1:

Create a product or service item;

1. Open Settings ⚙

2. Select Products and services

3. Click New

4. From the Product/Service information panel, select the appropriate type of item to create

5. Enter the information for the item

6. Hit Save and Close.

Step 2:

Create the customer invoice;

1. From the left menu Select + New

2. Choose Invoice 

3. Use the Customer ▼ dropdown menu and select the Customer name

4. In the Product/Service field, enter the item you created in Step 1

5. Enter the Amount of the warranty item

6. Hit Save and close.

Step 3:

Create a credit memo;

1. Select + New from the left menu and then Credit Memo

2. Enter the Customer name from the Customer drop-down list

3. Select the warranty item you created using the drop-down list in the Product/Service field

4. Enter the Amount and then hit Save and close.

Here's how to apply the credit memo to the invoice;

1. Hit + New and then Receive Payment

2. Select the Customer from the ▼ drop-down menu

3. Be sure to place a checkmark next to the Credit memo

4. Confirm the amounts

5. Hit Save and close

Please don't hesitate to reach back out to Community if you have any other questions.  Your success is our number one priority and we're always glad to assist!