Account settlement

"XYZ" is our creditor & debtor as well & We "ABC" are too debtor and creditor to XYZ. We have outstanding of Rs.60000/- due to pay XYZ & they have outstanding of Rs.30000/- due to pay us. But instead of paying or receiving money XYZ have just passed journal entries and almost settled our accounts. Now we are liable to pay only Rs.30000/-. Does these journal entries count? How to pass such journal entries or What are those journal entries?