Credit memo applied to incorrect Invoice line

AP customer applied a credit memo to Line 1 when they should have applied the credit memo to Line 2.

The PO is still open and there are encumbrances against it still.  The encumbrance on line 1 is actually greater than the line amount.  Line 1 is still Open.

Line2 - the one that should have had the credit memo applied is Closed.

How can we fix this situation?

Thank you.