diff --git a/erpnext/accounts/doctype/payment_entry/payment_entry.py b/erpnext/accounts/doctype/payment_entry/payment_entry.py
index ff2690f675..1cccbd9388 100644
--- a/erpnext/accounts/doctype/payment_entry/payment_entry.py
+++ b/erpnext/accounts/doctype/payment_entry/payment_entry.py
@@ -247,7 +247,7 @@ class PaymentEntry(AccountsController):
 		self.set_target_exchange_rate(ref_doc)
 
 	def set_source_exchange_rate(self, ref_doc=None):
-		if self.paid_from and not self.source_exchange_rate:
+		if self.paid_from:
 			if self.paid_from_account_currency == self.company_currency:
 				self.source_exchange_rate = 1
 			else:
diff --git a/erpnext/buying/doctype/purchase_order/test_purchase_order.py b/erpnext/buying/doctype/purchase_order/test_purchase_order.py
index 291d756a41..572d9d3865 100644
--- a/erpnext/buying/doctype/purchase_order/test_purchase_order.py
+++ b/erpnext/buying/doctype/purchase_order/test_purchase_order.py
@@ -743,9 +743,9 @@ class TestPurchaseOrder(FrappeTestCase):
 		pe = get_payment_entry("Purchase Order", po_doc.name)
 		pe.mode_of_payment = "Cash"
 		pe.paid_from = "Cash - _TC"
-		pe.source_exchange_rate = 80
-		pe.target_exchange_rate = 1
-		pe.paid_amount = po_doc.grand_total
+		pe.source_exchange_rate = 1
+		pe.target_exchange_rate = 80
+		pe.paid_amount = po_doc.base_grand_total
 		pe.save(ignore_permissions=True)
 		pe.submit()