QB Issue Resolution:

deposit the check and use accounts payable as the source account for the deposit, use the vendor name too


bring up pay bills, select the bill that the deposit created and apply the vendor credits, save

Resolution for Issue 'Refund From Vendor For Overpayment' available: Yes (Solved).
Source: Intuit Community forum.

Refund From Vendor For Overpayment: 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 Pay Bills
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Error Recovery for Pay Bills [Canada]
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