Credit Memos

[Kash]

I have a vendor who issues credit memos. These memos are later applied 
to the vendor's invoices. The invoices are entered as bills in the Gnucash.

It seems like I should enter the credit memos as bills with a negative 
total, but that is not allowed. They're not invoices, but could be 
considered such, but I'd have to create two separate entries for the 
same company, one as a vendor and one as a customer, which seems wrong. 
I did not test whether I could pay a bill with an invoice, but I'm 
betting not.

I could create an asset account called "credit memos" then pay bills out 
of that account, but it seems like there should be a more standardized 
method that allows the credit memos to appear on vendor reports.

I've found mention on the web to unpost an invoice, then add a 
transaction for the amount of the credit memo, then repost and pay, but 
this method does not address how to record the credit memos when they 
are generated, or how to get them to appear on vendor reports.

Suggestions?