Hello @bethbeth66,

You'll have to select your Accounts Payable account under the FROM ACCOUNT column when making a bank deposit. This way, it'll be linked to the credit you created (initially the refund you received). You can take a look at the screenshots below for your visual reference.

From here, you can open the Bill Pay window and select the credit to close your transaction.

1. Go to Vendors.
2. Select Pay Bills.
3. Under SELECT BILLS TO BE PAID, select the same vendor.
4. Click Set Credits.
5. Select the credit you recently created.
6. Click Done.
7. Select Pay Select Bill.

Lastly, here's a few articles you can read for ideas about how you can manage your vendors and expenses: Income and Expenses for QuickBooks Desktop.

If you have any other questions, just leave them in the comments. I'll be happy to lend a helping hand.