When you put a Payment Item on the invoice, the date of the invoice is the date of the payment. It also reduces what the invoice shows in the Customer Center and in transaction reports. In other words, if the two payments are the same date as the invoice, adding them to the invoice is fine, but now, if that paid the invoice in full, your Transactions Listing will always show $0. You have to Open these invoices to figure out what the Actual sale was.

Next, if the partial payments are different dates, you never put that on the invoice because that is the wrong Date.

The tool for what you are asking is Statements. Run Customer Statements to see the AR activities as a Listing of transactions. That will show Payments and Credit Memos and a running balance.

"I would like to setup a "TYPE" Account to use for information use only.   For example I would call the  item "Credit Memo Applied" and then in the Description type the amount."

You are messing with your Real Financial Data.