1. In onRecord > Procedures > Grading> Manage Grades > find the student and select View across from Grades & Credits then select Edit and remove the grades/credits for the dropped course(s) and select Save.
  2. Then go back to the student in onRecord > Procedures > Grading > Manage Grades > View Grades and Credits -Transfer and Edit to add the grades here.

Now the grades will appear on the Transcript as a transfer grade.