Hello there, westandpinedesign. Thanks for providing detailed information about your concern.

When recording vendor refund, it doesn't do anything with the discount and refund given. Those are only for customers. To record a vendor refund, here's what you'll need to do:

To start, let's enter a vendor credit. Here's how:

1. In the left menu, click the + New button. 
2. Select Vendor credit or Receive vendor credit.
3. In the Vendor drop-down, select your vendor.
4. Enter the necessary information on how you record purchases with the vendor.
5. Select Save and close.

Then, let's deposit the money you got from the refund. 

1. In the left menu, click the + New button. 
2. Select Bank Deposit. 
3. In the Account drop-down menu, select the account where you got the refund.
4. Go to the Add funds to this deposit section.
5. Select the vendor who gave you a refund in the Received from column.
6. Choose Accounts Payable in the Account column.
7. Enter the amount and the method your vendor used to refund you.
8. Select Save and close.

Once done, continue to Step 3 found on this article to connect the bank deposit to the vendor credit: Enter a refund from a vendor. After that, check the balance on your Accounts Payable.

If you have more questions regarding this or any QuickBooks concerns, feel free to comment back below. I'll be here to help. Have a great day.