[GNC] Bad Debt Recording

[Jeff]

Hi list,

Looking for some advice in recording (writing off) some bad debts in 
GnuCash when using the Business Invoice/Bills feature.

Example:
Have Client Bob who owes (has been send and Invoice) for $1000.
Bob are disputing the full amount and have only paid $700.

In GnuCash I open the Invoice and record a payment of $700.  This leaves 
Bob owing $300.

I can record a $300 amount going into Expenses -> Bad Debts, from the 
Accounts Receivable going directly via the Account page.

I think that this then effectively wipes out the debt.  (This may be 
completely wrong)

My issue is Bob still shows as owing $300.  I, maybe incorrectly, 
assumed it would effectively show as Bob owes nothing as we have 
forgiven the amount owed.

What step am I missing?
Can it be done through the Invoice screen to essentially "pay" the 
invoice?  The Payment side of the Invoice only seems to show "Assets" 
accounts (as expected).

Regards,
Jeff.