On 12/1/2021 we have a purchase invoice No. “123” from supplier “ABC” in the amount of 1,150.00 $.
On 01/01/2022 the full value of the invoice was paid by a subcontractor “DEF”, provided that the amount is posted to the subcontractor “DEF”. The debt transfer process was reconciled through a journal accounting entry on 01/01/2022 as follows:
By reviewing the accounts payable aging report “supplier’s statement (unpaid invoices)”:
The balance of the supplier “ABC” appears as a credit of 1,150.00$, the amount of the invoice.
Overdue 0 days
balance due 1,150.00$
It is assumed that supplier invoice No. “123” does not appear in the supplier’s statement (unpaid invoices), as it has been paid and the transaction reconciled through the journal entry.
I can see the Invoice is cleared by Less: Journal Entry — 6789 — 01-01-2022 amount of 1,150.00$
but the invoice still appears in the report of unpaid invices. this is the problem.
Sorry your screenshot clearly shows “invoice” next to your subcontractor. So you are trying to clear an invoice with and invoice, ie account payable with accounts receivable but you can only clear these with an actual financial transaction such as a receipt (to settle a sales invoice) or a payment (to settle a purchase invoice).
You can also use any P&L account and most Balance Sheet ones as Credit source to Debit an Invoice using journal entries but you can not use one invoice to settle another.
Where do you see a payment? The balance in my example is 0 hence there is no payment. There’s a transfer of a payable amount from one supplier to another (which is a rather weird situation).
You rightly use accounts payable and receivable so one invoice is debited and the other invoice credited, but recorded as payment transaction and thus registered as such agains the invoices.
