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 30ec6b896..6b1079adb 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
@@ -450,7 +450,16 @@ public class LoanWritePlatformServiceJpaRepositoryImpl implements LoanWritePlatf
         final String noteText = command.stringValueOfParameterNamed("note");
         if (StringUtils.isNotBlank(noteText)) {
             changes.put("note", noteText);
-            Note note = Note.loanTransactionNote(loan, newTransactionDetail, noteText);
+            Note note = null;
+            /**
+             * If a new transaction is not created, associate note with the
+             * transaction to be adjusted
+             **/
+            if (newTransactionDetail.isGreaterThanZero(loan.getPrincpal().getCurrency())) {
+                note = Note.loanTransactionNote(loan, newTransactionDetail, noteText);
+            } else {
+                note = Note.loanTransactionNote(loan, transactionToAdjust, noteText);
+            }
             this.noteRepository.save(note);
         }