diff --git a/mifosng-provider/src/main/java/org/mifosplatform/accounting/journalentry/service/AccrualBasedAccountingProcessorForLoan.java b/mifosng-provider/src/main/java/org/mifosplatform/accounting/journalentry/service/AccrualBasedAccountingProcessorForLoan.java
index dc88c592a..9dcd35fc2 100755
--- a/mifosng-provider/src/main/java/org/mifosplatform/accounting/journalentry/service/AccrualBasedAccountingProcessorForLoan.java
+++ b/mifosng-provider/src/main/java/org/mifosplatform/accounting/journalentry/service/AccrualBasedAccountingProcessorForLoan.java
@@ -77,6 +77,7 @@ public class AccrualBasedAccountingProcessorForLoan implements AccountingProcess
         final String transactionId = loanTransactionDTO.getTransactionId();
         final Date transactionDate = loanTransactionDTO.getTransactionDate();
         final BigDecimal disbursalAmount = loanTransactionDTO.getAmount();
+        final BigDecimal interestAmount = loanDTO.getCalculatedInterest();
         final boolean isReversed = loanTransactionDTO.isReversed();
 
         // create journal entries for the disbursement (or disbursement
@@ -88,7 +89,7 @@ public class AccrualBasedAccountingProcessorForLoan implements AccountingProcess
         BigDecimal interestApplied = loanDTO.getCalculatedInterest();
         if (interestApplied != null && !(interestApplied.compareTo(BigDecimal.ZERO) == 0)) {
             helper.createAccrualBasedJournalEntriesAndReversalsForLoan(office, ACCRUAL_ACCOUNTS_FOR_LOAN.INTEREST_RECEIVABLE,
-                    ACCRUAL_ACCOUNTS_FOR_LOAN.INTEREST_ON_LOANS, loanProductId, loanId, transactionId, transactionDate, disbursalAmount,
+                    ACCRUAL_ACCOUNTS_FOR_LOAN.INTEREST_ON_LOANS, loanProductId, loanId, transactionId, transactionDate, interestAmount,
                     isReversed);
         }
     }
@@ -237,8 +238,8 @@ public class AccrualBasedAccountingProcessorForLoan implements AccountingProcess
         // create journal entries for the penalties application (or reversal)
         else if (penaltiesAmount != null && !(penaltiesAmount.compareTo(BigDecimal.ZERO) == 0)) {
             helper.createAccrualBasedJournalEntriesAndReversalsForLoan(office, ACCRUAL_ACCOUNTS_FOR_LOAN.PENALTIES_RECEIVABLE,
-                    ACCRUAL_ACCOUNTS_FOR_LOAN.INCOME_FROM_PENALTIES, loanProductId, loanId, transactionId, transactionDate, feesAmount,
-                    isReversed);
+                    ACCRUAL_ACCOUNTS_FOR_LOAN.INCOME_FROM_PENALTIES, loanProductId, loanId, transactionId, transactionDate,
+                    penaltiesAmount, isReversed);
         }
     }
 
diff --git a/mifosng-provider/src/main/java/org/mifosplatform/portfolio/loanaccount/domain/Loan.java b/mifosng-provider/src/main/java/org/mifosplatform/portfolio/loanaccount/domain/Loan.java
index e32121b01..7a17fe539 100644
--- a/mifosng-provider/src/main/java/org/mifosplatform/portfolio/loanaccount/domain/Loan.java
+++ b/mifosng-provider/src/main/java/org/mifosplatform/portfolio/loanaccount/domain/Loan.java
@@ -411,6 +411,11 @@ public class Loan extends AbstractPersistable<Long> {
         final LoanRepaymentScheduleTransactionProcessor loanRepaymentScheduleTransactionProcessor = this.transactionProcessorFactory
                 .determineProcessor(this.transactionProcessingStrategy);
 
+        // store Id's of existing loan transactions and existing reversed loan
+        // transactions
+        existingTransactionIds.addAll(findExistingTransactionIds());
+        existingReversedTransactionIds.addAll(findExistingReversedTransactionIds());
+
         if (!loanCharge.isDueAtDisbursement()) {
             final List<LoanTransaction> allNonContraTransactionsPostDisbursement = retreiveListOfTransactionsPostDisbursement();
             changedTransactionDetail = loanRepaymentScheduleTransactionProcessor.handleTransaction(getDisbursementDate(),
@@ -426,16 +431,13 @@ public class Loan extends AbstractPersistable<Long> {
         }
 
         updateLoanSummaryDerivedFields();
-
-        existingTransactionIds.addAll(findExistingTransactionIds());
-        existingReversedTransactionIds.addAll(findExistingReversedTransactionIds());
-
         return changedTransactionDetail;
     }
 
     /**
      * Creates a loanTransaction for "Apply Charge Event" with transaction date
-     * set to "suppliedTransactionDate"
+     * set to "suppliedTransactionDate". The newly created transaction is also
+     * added to the Loan on which this method is called.
      * 
      * If "suppliedTransactionDate" is not passed Id, the transaction date is
      * set to the loans due date if the due date is lesser than todays date. If
@@ -445,7 +447,7 @@ public class Loan extends AbstractPersistable<Long> {
      * @param suppliedTransactionDate
      * @return
      */
-    public LoanTransaction getChargeAppliedTransaction(final LoanCharge loanCharge, final LocalDate suppliedTransactionDate) {
+    public LoanTransaction handleChargeAppliedTransaction(final LoanCharge loanCharge, final LocalDate suppliedTransactionDate) {
         final Money chargeAmount = loanCharge.getAmount(getCurrency());
         Money feeCharges = chargeAmount;
         Money penaltyCharges = Money.zero(loanCurrency());
@@ -471,6 +473,7 @@ public class Loan extends AbstractPersistable<Long> {
 
         final LoanTransaction applyLoanChargeTransaction = LoanTransaction.applyLoanCharge(this, chargeAmount, transactionDate, feeCharges,
                 penaltyCharges);
+        this.loanTransactions.add(applyLoanChargeTransaction);
         return applyLoanChargeTransaction;
     }
 
@@ -629,6 +632,7 @@ public class Loan extends AbstractPersistable<Long> {
 
         final LoanTransaction waiveLoanChargeTransaction = LoanTransaction.waiveLoanCharge(this, amountWaived, transactionDate,
                 feeChargesWaived, penaltyChargesWaived);
+        this.loanTransactions.add(waiveLoanChargeTransaction);
 
         // Waive of charges whose due date falls after latest 'repayment'
         // transaction dont require entire loan schedule to be reprocessed.
@@ -1338,8 +1342,7 @@ public class Loan extends AbstractPersistable<Long> {
                 if (charge.isDueAtDisbursement()) {
                     charge.markAsFullyPaid();
                 } else {
-                    LoanTransaction loanChargeAppliedTransaction = getChargeAppliedTransaction(charge, disbursedOn);
-                    this.loanTransactions.add(loanChargeAppliedTransaction);
+                    handleChargeAppliedTransaction(charge, disbursedOn);
                 }
             }
         }
diff --git a/mifosng-provider/src/main/java/org/mifosplatform/portfolio/loanaccount/domain/LoanTransaction.java b/mifosng-provider/src/main/java/org/mifosplatform/portfolio/loanaccount/domain/LoanTransaction.java
index 698f2b273..f02c6819b 100644
--- a/mifosng-provider/src/main/java/org/mifosplatform/portfolio/loanaccount/domain/LoanTransaction.java
+++ b/mifosng-provider/src/main/java/org/mifosplatform/portfolio/loanaccount/domain/LoanTransaction.java
@@ -96,7 +96,6 @@ public final class LoanTransaction extends AbstractPersistable<Long> {
             final Money penaltyCharges) {
         LoanTransaction applyCharge = new LoanTransaction(loan, LoanTransactionType.APPLY_CHARGES, amount.getAmount(), applyDate);
         applyCharge.updateChargesComponents(feeCharges, penaltyCharges);
-
         return applyCharge;
     }
 
diff --git a/mifosng-provider/src/main/java/org/mifosplatform/portfolio/loanaccount/service/LoanWritePlatformServiceJpaRepositoryImpl.java b/mifosng-provider/src/main/java/org/mifosplatform/portfolio/loanaccount/service/LoanWritePlatformServiceJpaRepositoryImpl.java
index 3bf6e86d5..89d614e97 100644
--- a/mifosng-provider/src/main/java/org/mifosplatform/portfolio/loanaccount/service/LoanWritePlatformServiceJpaRepositoryImpl.java
+++ b/mifosng-provider/src/main/java/org/mifosplatform/portfolio/loanaccount/service/LoanWritePlatformServiceJpaRepositoryImpl.java
@@ -552,7 +552,7 @@ public class LoanWritePlatformServiceJpaRepositoryImpl implements LoanWritePlatf
         final List<Long> existingReversedTransactionIds = new ArrayList<Long>();
         this.loanChargeRepository.save(loanCharge);
 
-        final LoanTransaction applyLoanChargeTransaction = loan.getChargeAppliedTransaction(loanCharge, null);
+        final LoanTransaction applyLoanChargeTransaction = loan.handleChargeAppliedTransaction(loanCharge, null);
         final ChangedTransactionDetail changedTransactionDetail = loan.addLoanCharge(loanCharge, existingTransactionIds,
                 existingReversedTransactionIds);