Receivable, Payables

Receivable, Payables

We have a client that also invoices us. Our relationship has come to an end and we owe them an amount of money and they owe us, we would like to offset what we owe each other and then make one final payment. There are also small credits recorded for each one of us. How do record this final payment so that receivables, payables and over-payments are set to zero?

Example

Contact: ABC Firm
Receivables: $ 36 000
Payables: $ 40 000

Unused credits:
Receivables: $ 150
Payables: $ 760