Thanks for checking in with us, BBWire. Let me help you sort this out.

To ensure you can apply the $300 prepayment, I'd suggest deleting and re-creating the transactions (bill and bill payment check).
 

To delete them, just open the transaction and click Delete.

After that, enter a bill amounting to $700 and Save the transaction.

Once saved, let's apply the $300 prepayment. Here's how:

1. Click Vendors at the top menu bar and select Pay Bills.
2. Choose the bill and click Set Credits.
   
3. Under the AMT. TO USE column, enter 300, and click Done.
   
4. This will show the $300 prepayment, your available credits are $700 and the bill is open with a $400 balance due.
5. Hit Pay Selected Bills.
   

To know more about vendor prepayments, check out this article: Record vendor prepayments or deposits for prepaid parts or services. This will provide you ways on how to enter prepayments as well as steps to view them in QuickBooks Desktop.

If you have additional questions, you're always welcome to drop a comment below. I'll be around to help. Have a good one!