NOTE: This article walks you though the process in classic ASAP. For instructions in the latest version of ASAP, see Issue account credit.
Find the invoice that you want to apply a credit to, select the "Actions" button and click on the "Give Credit" link. Select the type of credit you are giving the invoice, type the credit amount and notes (notes are optional) and click Give Credit.
The other option would be to process a Refund and issue it towards Credit. Either option will work the same.