diff --git a/erpnext/accounts/doctype/payment_entry/payment_entry.js b/erpnext/accounts/doctype/payment_entry/payment_entry.js
index 9e3fa71e97..776bacfcce 100644
--- a/erpnext/accounts/doctype/payment_entry/payment_entry.js
+++ b/erpnext/accounts/doctype/payment_entry/payment_entry.js
@@ -676,30 +676,17 @@ frappe.ui.form.on('Payment Entry', {
 			function(d) { return flt(d.amount) }));
 
 		if(frm.doc.party) {
-			var party_amount = frm.doc.payment_type=="Receive" ?
-				frm.doc.paid_amount : frm.doc.received_amount;
-			var company_currency = frm.doc.company? frappe.get_doc(":Company", frm.doc.company).default_currency: "";
-
-			if (frm.doc.party_account_currency == company_currency) {
-				if(frm.doc.payment_type == "Receive" && frm.doc.total_allocated_amount <= party_amount + total_deductions) {
-					unallocated_amount = party_amount - (frm.doc.total_allocated_amount - total_deductions);
-				} else if (frm.doc.payment_type == "Pay" && frm.doc.total_allocated_amount <= party_amount - total_deductions) {
-					unallocated_amount = party_amount - (frm.doc.total_allocated_amount + total_deductions);
-				}
-			} else {
-				if(frm.doc.payment_type == "Receive"
-					&& frm.doc.base_total_allocated_amount <= frm.doc.base_received_amount + total_deductions
-					&& frm.doc.total_allocated_amount < frm.doc.paid_amount) {
-						unallocated_amount = (frm.doc.base_received_amount + total_deductions
-							- frm.doc.base_total_allocated_amount) / frm.doc.source_exchange_rate;
-				} else if (frm.doc.payment_type == "Pay"
-					&& frm.doc.base_total_allocated_amount < frm.doc.base_paid_amount - total_deductions
-					&& frm.doc.total_allocated_amount < frm.doc.received_amount) {
-						unallocated_amount = (frm.doc.base_paid_amount - (total_deductions
-							+ frm.doc.base_total_allocated_amount)) / frm.doc.target_exchange_rate;
-				}
+			if(frm.doc.payment_type == "Receive"
+				&& frm.doc.base_total_allocated_amount < frm.doc.base_received_amount + total_deductions
+				&& frm.doc.total_allocated_amount < frm.doc.paid_amount + (total_deductions / frm.doc.source_exchange_rate)) {
+					unallocated_amount = (frm.doc.base_received_amount + total_deductions
+						- frm.doc.base_total_allocated_amount) / frm.doc.source_exchange_rate;
+			} else if (frm.doc.payment_type == "Pay"
+				&& frm.doc.base_total_allocated_amount < frm.doc.base_paid_amount - total_deductions
+				&& frm.doc.total_allocated_amount < frm.doc.received_amount + (total_deductions / frm.doc.target_exchange_rate)) {
+					unallocated_amount = (frm.doc.base_paid_amount - (total_deductions
+						+ frm.doc.base_total_allocated_amount)) / frm.doc.target_exchange_rate;
 			}
-			
 		}
 		frm.set_value("unallocated_amount", unallocated_amount);
 		frm.trigger("set_difference_amount");
diff --git a/erpnext/accounts/doctype/payment_entry/payment_entry.py b/erpnext/accounts/doctype/payment_entry/payment_entry.py
index 7dfa5c8561..eafdac3c31 100644
--- a/erpnext/accounts/doctype/payment_entry/payment_entry.py
+++ b/erpnext/accounts/doctype/payment_entry/payment_entry.py
@@ -292,30 +292,18 @@ class PaymentEntry(AccountsController):
 
 	def set_unallocated_amount(self):
 		self.unallocated_amount = 0
-
 		if self.party:
 			total_deductions = sum([flt(d.amount) for d in self.get("deductions")])
-
-			if self.party_account_currency == self.company_currency:
-				if self.payment_type == "Receive" \
-					and self.total_allocated_amount <= self.paid_amount + total_deductions:
-						self.unallocated_amount = self.paid_amount - \
-							(self.total_allocated_amount - total_deductions)
-				elif self.payment_type == "Pay" \
-					and self.total_allocated_amount <= self.received_amount - total_deductions:
-						self.unallocated_amount = self.received_amount - \
-							(self.total_allocated_amount + total_deductions)
-			else:
-				if self.payment_type == "Receive" \
-					and self.base_total_allocated_amount <= self.base_received_amount + total_deductions \
-					and self.total_allocated_amount < self.paid_amount:
-						self.unallocated_amount = (self.base_received_amount + total_deductions - 
-							self.base_total_allocated_amount) / self.source_exchange_rate
-				elif self.payment_type == "Pay" \
-					and self.base_total_allocated_amount < (self.base_paid_amount - total_deductions) \
-					and self.total_allocated_amount < self.received_amount:
-						self.unallocated_amount = (self.base_paid_amount - (total_deductions + 
-							self.base_total_allocated_amount)) / self.target_exchange_rate
+			if self.payment_type == "Receive" \
+				and self.base_total_allocated_amount < self.base_received_amount + total_deductions \
+				and self.total_allocated_amount < self.paid_amount + (total_deductions / self.source_exchange_rate):
+					self.unallocated_amount = (self.base_received_amount + total_deductions - 
+						self.base_total_allocated_amount) / self.source_exchange_rate
+			elif self.payment_type == "Pay" \
+				and self.base_total_allocated_amount < (self.base_paid_amount - total_deductions) \
+				and self.total_allocated_amount < self.received_amount + (total_deductions / self.target_exchange_rate):
+					self.unallocated_amount = (self.base_paid_amount - (total_deductions + 
+						self.base_total_allocated_amount)) / self.target_exchange_rate
 
 	def set_difference_amount(self):
 		base_unallocated_amount = flt(self.unallocated_amount) * (flt(self.source_exchange_rate)