Cancelling a pre-paid sale in GnuCash

[Buddha Buck]

Here's the situation:

Two customers registered for a class my non-profit is offering, and paid
for it via PayPal.  I recorded this in GnuCash by creating two invoices for
the class (with a posted date of 2013-03-10, the date of the class) and a
payment for each invoice (with payment date of 2-10 and 2-14, the dates of
the payments/registrations).

Unfortunately, the minimum class size the instructor is willing to teach is
5, and so the class was cancelled when the registration deadline passed. I
need to refund the class fees to the two participants.

How in GnuCash do I process the refund?

What I want to happen in the end is that the Customer Report for that
customer report a balance of $0, my PayPal balance went up by the price of
the class on 2-10 and 2-14, and down by twice the price of a class on 3-8,
and that the net income is $0.

I haven't found much of help in the mailing list archives, but perhaps I
was looking for the wrong keywords.