If the bank charged you the $35, then you should enter this as a separate transaction.
You will end up with $185 into your current account from the client to pay the $185 invoice (you can list the $35 as a separate line on the invoice if you want, but it's incidental that this money is going to be used by you to pay the bank charges)
As a separate entry then show the $35 going from your bank account to pay 'bank charges' (there's probably a nominal code for bank charges which will contain overdraft fees and transaction costs) - as Tammster said, you can create this as a $35 invoice from the bank which you then pay from your current account.
This should all reconcile correctly (on the bank rec, you'll have a $35 fee which reconciles against your $35 payment, and a $185 lodgment which reconciles against the client invoice)
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