QB Issue Resolution:
Deleting or removing transactions that was already been reconciled can affect the balance of your reconciliation report. Since you mentioned that the payment didn’t actually occur in the first place, and you don’t want to have it deleted from the reconciled transaction, you can create a Journal Entry for it.
Check out this article to know more about creating Journal Entries in QuickBooks Online (QBO): Enter Journal Entry.
Before doing that, I’d still suggest consulting an accountant to help and guide you on what’s the best way to handle this. Your accountant can provide more expert advice in dealing with this concern.
Resolution for Issue 'Correct journal entry category error on reconciled report' available: Yes (Solved).
Source: Intuit Community forum.
Correct journal entry category error on reconciled report: this issue or error code is a known issue in Quickbooks Online (QBO) and/or Quickbooks. Support for this issue is available either by self-service or paid support options. Experts are available to resolve your Quickbooks issue to ensure minimal downtime and continue running your business. First try to resolve the issue yourself by looking for a resolution described below. If it is a complex issue or you are unable to solve the issue, you may contact us by clicking here or by using other support options.Support for Journal Entry
Quickbooks Repair Pro will resolve it efficiently and affordably. Guaranteed resolution of your issue, or you pay nothing!
Error Recovery for Journal Entry [Canada]
E-Tech is the #1 Quickbooks data migration and Conversion service provider.
Additional Support Options: