Cannot generate PO receipt because of error "serial number already being used"

We had a serialized part that was returned to supplier for repair. Part was repaired and re-delivered. We tried to create a PO Receipt (and we must enter the SN since it was serialized), we get this error, "(INV-2416344) You cannot use the serial number requested because it is already being used". We checked Inventory Management, and confirmed it is not in inventory. That particular SN had a transaction type "Return to Supplier", with a usage "Issued out of stores". Need some guidance on what else to troubleshoot.