diff --git a/fineract-loan/src/main/java/org/apache/fineract/portfolio/loanaccount/domain/transactionprocessor/AbstractLoanRepaymentScheduleTransactionProcessor.java b/fineract-loan/src/main/java/org/apache/fineract/portfolio/loanaccount/domain/transactionprocessor/AbstractLoanRepaymentScheduleTransactionProcessor.java
index 3f1430c112..77f1562fef 100644
--- a/fineract-loan/src/main/java/org/apache/fineract/portfolio/loanaccount/domain/transactionprocessor/AbstractLoanRepaymentScheduleTransactionProcessor.java
+++ b/fineract-loan/src/main/java/org/apache/fineract/portfolio/loanaccount/domain/transactionprocessor/AbstractLoanRepaymentScheduleTransactionProcessor.java
@@ -255,6 +255,7 @@ public void processLatestTransaction(final LoanTransaction loanTransaction, fina
             case WRITEOFF -> handleWriteOff(loanTransaction, ctx.getCurrency(), ctx.getInstallments());
             case REFUND_FOR_ACTIVE_LOAN -> handleRefund(loanTransaction, ctx.getCurrency(), ctx.getInstallments(), ctx.getCharges());
             case CHARGEBACK -> handleChargeback(loanTransaction, ctx);
+            case CHARGE_OFF -> handleChargeOff(loanTransaction, ctx);
             default -> {
                 Money transactionAmountUnprocessed = handleTransactionAndCharges(loanTransaction, ctx.getCurrency(), ctx.getInstallments(),
                         ctx.getCharges(), null, false);
@@ -394,7 +395,7 @@ private void recalculateChargeOffTransaction(ChangedTransactionDetail changedTra
                 principalPortion = principalPortion.plus(currentInstallment.getPrincipalOutstanding(currency));
                 interestPortion = interestPortion.plus(currentInstallment.getInterestOutstanding(currency));
                 feeChargesPortion = feeChargesPortion.plus(currentInstallment.getFeeChargesOutstanding(currency));
-                penaltychargesPortion = penaltychargesPortion.plus(currentInstallment.getPenaltyChargesCharged(currency));
+                penaltychargesPortion = penaltychargesPortion.plus(currentInstallment.getPenaltyChargesOutstanding(currency));
             }
         }
 
@@ -786,6 +787,10 @@ protected void handleChargeback(LoanTransaction loanTransaction, TransactionCtx
         processCreditTransaction(loanTransaction, ctx.getOverpaymentHolder(), ctx.getCurrency(), ctx.getInstallments());
     }
 
+    private void handleChargeOff(LoanTransaction loanTransaction, TransactionCtx transactionCtx) {
+        recalculateChargeOffTransaction(transactionCtx.getChangedTransactionDetail(), loanTransaction, transactionCtx.getCurrency(), transactionCtx.getInstallments());
+    }
+
     protected void handleCreditBalanceRefund(LoanTransaction loanTransaction, MonetaryCurrency currency,
             List<LoanRepaymentScheduleInstallment> installments, MoneyHolder overpaidAmountHolder) {
         processCreditTransaction(loanTransaction, overpaidAmountHolder, currency, installments);