Hello Musi,

Typically this would be entered as a vendor prepayment. You can see our knowledgebase article here for additional information.

Thanks,

Chris Parrish

Process the second payment as a payment on account. When you order the next time from  this vendor apply the payment on account to the vendor's new invoice. OR If the vendor refunds the over-payment, then process an invoice for this vendor using a bank account instead of an expense account. This will deposit the funds in the bank. then go to the vendor's A/P ledger and there will be both an invoice and the prepayment that can be applied to each other and the account will be clear.