AP Prepayments can only be applied to a single, non-existing invoice number. It cannot be applied to credit notes. You will not be able to print the pre-payment check and list credit notes or anything other than that single invoice number on the stub.
If you created a 'dummy' invoice for the vendor, and then created a Payment, you could apply this payment to the credit notes and the dummy; however, you cannot add an overpayment in addition to those details. You wouldn't be able to do all of this in one check, so your idea is creative, but it wouldn't work either.
So you are relegated to having to do multiple transactions, if you want to use up the unapplied credit notes and also create a new pre-payment. One would be the prepayment check (reduced, less the credit note value). Two would be the invoice - not for $0 but instead for the actual amount that is to be pre-paid, because $0 invoices will be considered complete and not appear in the payment list. Three would be a $0 manual check Payment that is applied to the credit notes, the prepayment and the invoice. This Payment could print all the details on the stub (as an Additional Form, as you can't print $0 checks), but you have to wait until the invoice is received and that may be too late.
In short, more creativity is required and I don't expect that you will be able to do everything you were hoping to.
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Regards,
Softrak Tech Support