Here's a guide on how to create, manage, and apply vendor credit.
Viewing and creating vendor/supplier credits is easy. To view, go to Accounts Payable > Vendor Credit Management. 
To view all vendor credits, click Apply. To create a new one, click Add.
Enter the Vendor #, Vendor Invoice #, and Vendor Invoice Date. Add any items in the credit (e.g. the reason for the credit). Write the description in the Item column. Determine the type of each item from the dropdown (to categorize it). Use the Add Line button if you need to add more than one. Click Save when you’re done.
Click Yes.
When viewing a particular Vendor Credit, by going to the Activity tab, you can see associated A/P Bill Payments once the credit has been applied. Before that transaction occurs, the Activity tab will be blank.
To apply a vendor credit, scroll to the Applying Credit section in this user guide.
See related:
How do I create a credit memo?