diff --git a/mifosng-db/migrations/core_db/V174__remove_interest_accrual.sql b/mifosng-db/migrations/core_db/V174__remove_interest_accrual.sql
new file mode 100644
index 000000000..cd4546329
--- /dev/null
+++ b/mifosng-db/migrations/core_db/V174__remove_interest_accrual.sql
@@ -0,0 +1,5 @@
+/**Remove all existing apply interest transaction Types**/
+update m_loan_transaction set interest_portion_derived=amount where transaction_type_enum=11;
+update m_loan_transaction set transaction_type_enum=10 where transaction_type_enum=11;
+
+
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 5d67a7e8e..cbfda9d08 100755
--- 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
@@ -1744,10 +1744,11 @@ public class Loan extends AbstractPersistable<Long> {
 
         /**
          * Add an interest applied transaction of the interest is accrued
-         * upfront (Up front accrual)
+         * upfront (Up front accrual), no accounting or cash based accounting is
+         * selected
          **/
 
-        if (isUpfrontAccrualAccountingEnabledOnLoanProduct()) {
+        if (isNoneOrCashOrUpfrontAccrualAccountingEnabledOnLoanProduct()) {
             final LoanTransaction interestAppliedTransaction = LoanTransaction.accrueInterest(getOffice(), this, interestApplied,
                     actualDisbursementDate);
             this.loanTransactions.add(interestAppliedTransaction);
@@ -2007,10 +2008,10 @@ public class Loan extends AbstractPersistable<Long> {
                     }
                 } else {
                     /**
-                     * create a Charge applied transaction if Upfront Accrual is
-                     * enabled
+                     * create a Charge applied transaction if Upfront Accrual,
+                     * None or Cash based accounting is enabled
                      **/
-                    if (isUpfrontAccrualAccountingEnabledOnLoanProduct()) {
+                    if (isNoneOrCashOrUpfrontAccrualAccountingEnabledOnLoanProduct()) {
                         handleChargeAppliedTransaction(charge, disbursedOn);
                     }
                 }
@@ -3283,6 +3284,15 @@ public class Loan extends AbstractPersistable<Long> {
         return this.loanProduct.isUpfrontAccrualAccountingEnabled();
     }
 
+    public Boolean isAccountingDisabledOnLoanProduct() {
+        return this.loanProduct.isAccountingDisabled();
+    }
+
+    public Boolean isNoneOrCashOrUpfrontAccrualAccountingEnabledOnLoanProduct() {
+        return isCashBasedAccountingEnabledOnLoanProduct() || isUpfrontAccrualAccountingEnabledOnLoanProduct()
+                || isAccountingDisabledOnLoanProduct();
+    }
+
     private Boolean isPeriodicAccrualAccountingEnabledOnLoanProduct() {
         return this.loanProduct.isPeriodicAccrualAccountingEnabled();
     }
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 91506f3f0..5cc353b2e 100755
--- 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
@@ -579,7 +579,7 @@ public class LoanWritePlatformServiceJpaRepositoryImpl implements LoanWritePlatf
         changes.put("transactionAmount", command.stringValueOfParameterNamed("transactionAmount"));
         changes.put("locale", command.locale());
         changes.put("dateFormat", command.dateFormat());
-        changes.put("paymentTypeId",command.stringValueOfParameterNamed("paymentTypeId"));
+        changes.put("paymentTypeId", command.stringValueOfParameterNamed("paymentTypeId"));
 
         final String noteText = command.stringValueOfParameterNamed("note");
         if (StringUtils.isNotBlank(noteText)) {
@@ -656,7 +656,7 @@ public class LoanWritePlatformServiceJpaRepositoryImpl implements LoanWritePlatf
         changes.put("transactionAmount", command.stringValueOfParameterNamed("transactionAmount"));
         changes.put("locale", command.locale());
         changes.put("dateFormat", command.dateFormat());
-        changes.put("paymentTypeId",command.stringValueOfParameterNamed("paymentTypeId"));
+        changes.put("paymentTypeId", command.stringValueOfParameterNamed("paymentTypeId"));
 
         final List<Long> existingTransactionIds = new ArrayList<Long>();
         final List<Long> existingReversedTransactionIds = new ArrayList<Long>();
@@ -1047,7 +1047,7 @@ public class LoanWritePlatformServiceJpaRepositoryImpl implements LoanWritePlatf
          * Upfront Accruals
          **/
         if (loan.status().isActive()) {
-            if (loan.isUpfrontAccrualAccountingEnabledOnLoanProduct()) {
+            if (loan.isNoneOrCashOrUpfrontAccrualAccountingEnabledOnLoanProduct()) {
                 final LoanTransaction applyLoanChargeTransaction = loan.handleChargeAppliedTransaction(loanCharge, null);
                 this.loanTransactionRepository.save(applyLoanChargeTransaction);
             }
diff --git a/mifosng-provider/src/main/java/org/mifosplatform/portfolio/loanproduct/domain/LoanProduct.java b/mifosng-provider/src/main/java/org/mifosplatform/portfolio/loanproduct/domain/LoanProduct.java
index 62c99766c..da35cbde5 100644
--- a/mifosng-provider/src/main/java/org/mifosplatform/portfolio/loanproduct/domain/LoanProduct.java
+++ b/mifosng-provider/src/main/java/org/mifosplatform/portfolio/loanproduct/domain/LoanProduct.java
@@ -623,6 +623,10 @@ public class LoanProduct extends AbstractPersistable<Long> {
         return actualChanges;
     }
 
+    public boolean isAccountingDisabled() {
+        return AccountingRuleType.NONE.getValue().equals(this.accountingRule);
+    }
+
     public boolean isCashBasedAccountingEnabled() {
         return AccountingRuleType.CASH_BASED.getValue().equals(this.accountingRule);
     }