diff --git a/erpnext/accounts/doctype/payment_entry/payment_entry.py b/erpnext/accounts/doctype/payment_entry/payment_entry.py
index c732c0a1c5..e2e655befb 100644
--- a/erpnext/accounts/doctype/payment_entry/payment_entry.py
+++ b/erpnext/accounts/doctype/payment_entry/payment_entry.py
@@ -1113,6 +1113,7 @@ class PaymentEntry(AccountsController):
 					gl_entries.append(gle)
 
 				if self.unallocated_amount:
+					dr_or_cr = "credit" if self.payment_type == "Receive" else "debit"
 					exchange_rate = self.get_exchange_rate()
 					base_unallocated_amount = self.unallocated_amount * exchange_rate