I ran across this thread because I had the same problem: I needed to apply a check received form a vendor for a refund. (insurance again).

So I did the natural thing: I created a vendor credit, then a bank deposit, and assumed I could apply the deposit to a credit.

It was not until I found the response from KhimG from 11/29/2018, that I resolved my problem.

This solution seems SO convoluted, AND so much more difficult than it is in Quickbooks Desktop. It makes no sense that I have to create a check, in order to apply a deposit to an existing credit. This create a third (unnecessary) transaction that is not present in Desktop, at least from my recollection.

And it makes me furious that my CPA convinced me to switch to online, and it is quite a process to switch back, which I tried once without success, but will do in the near future.

But thank you KhimG for the solution.