Thanks for coming to the Community, cgonzalez.

Bad debt is an income that won't be paid anymore. Since a credit memo was applied to the invoice, it'll show as an income and expense in the Profit and Loss report to offset the amount.

However, if you want to show it only as an expense in the Profit and Loss report, simply use the Discounts and Credits button to increase the balance in your bad debt account and decrease your net profit by the amount of the unpaid invoice.

I'll be glad to show you how:

1. First, go to the Customers menu and choose Receive Payments.
2. Select the customer's name.
3. Leave the amount field at 0.00.
4. Highlight the line item that will not be paid.
5. Click the Discount & Credits button.
6. On the Discount tab, make sure to enter the bad debt amount in the Amount of Discount field.
7. In the Discount Account drop-down, choose the bad debt expense account , then click Done.
8. Hit Save & Close to record the payment.

Once done, open the Profit and Loss report to check the bad debt account.

As always, you can refer to this article for the detailed steps: Write off bad debt.

I'd like to ensure that you're able to resolve this concern, so please let me know how that works for you. Best regards.