Letter of Credit process in A/P

Hello community

We have a request to be able to account for LC handling in accts payable. The scenario is;

Product is requested from the shipper

the bank creates a  letter of credit on the company account and notifies the shipper (usually overseas)

The product is shipped and the invoice sent and arrives in port

The LC amount is released to the shipper

The product (PO) is received  and the invoice is matched

The question remains how to clear the matched invoice(AP record)  as the payment has been made bu lc

Would setting up and using prepayment processing for this type of transaction handle it properly.  i.e. creating the prepayment item when the LC is created and clearing the entered ap voucher against it