Use a journal entry to settle an outstanding payment with stock-in-hand

A journal entry can be used to settle transactions which are not included by default in the ERP. Eg. when settling transactions of a single person who is both a buyer and seller.

I want to settle a transaction by paying with stock-in-hand to an outstanding supplier (vendor). However while doing a journal entry I can proceed till stock-in-hand as the other ledger. After that I dont see an option to select any particular stock.

The dropdown is empty and prompts to create a new docType. While I have read the documentation fairly, I am not sure if creating a docType is what needs to be done here, because a ledger of stock in hand exists.

I believe I might have not ticked some setting somewhere which allows this to be settled in a journal.

Please help.

Regards
PK