diff --git a/erpnext/accounts/utils.py b/erpnext/accounts/utils.py
index 4327a1f55314..5c3715174706 100644
--- a/erpnext/accounts/utils.py
+++ b/erpnext/accounts/utils.py
@@ -624,7 +624,12 @@ def update_reference_in_payment_entry(
 		"outstanding_amount": d.outstanding_amount,
 		"allocated_amount": d.allocated_amount,
 		"exchange_rate": d.exchange_rate if d.exchange_gain_loss else payment_entry.get_exchange_rate(),
+<<<<<<< HEAD
 		"exchange_gain_loss": d.exchange_gain_loss,  # only populated from invoice in case of advance allocation
+=======
+		"exchange_gain_loss": d.exchange_gain_loss,
+		"account": d.account,
+>>>>>>> 23df4205f8 (fix: overallocation on Payment with PO/SO)
 	}
 
 	if d.voucher_detail_no:
@@ -636,22 +641,21 @@ def update_reference_in_payment_entry(
 				existing_row.reference_doctype, existing_row.reference_name
 			).set_total_advance_paid()
 
-		original_row = existing_row.as_dict().copy()
-		existing_row.update(reference_details)
+		if d.allocated_amount <= existing_row.allocated_amount:
+			existing_row.allocated_amount -= d.allocated_amount
 
-		if d.allocated_amount < original_row.allocated_amount:
 			new_row = payment_entry.append("references")
 			new_row.docstatus = 1
 			for field in list(reference_details):
-				new_row.set(field, original_row[field])
+				new_row.set(field, reference_details[field])
 
-			new_row.allocated_amount = original_row.allocated_amount - d.allocated_amount
 	else:
 		new_row = payment_entry.append("references")
 		new_row.docstatus = 1
 		new_row.update(reference_details)
 
 	payment_entry.flags.ignore_validate_update_after_submit = True
+	payment_entry.clear_unallocated_reference_document_rows()
 	payment_entry.setup_party_account_field()
 	payment_entry.set_missing_values()
 	if not skip_ref_details_update_for_pe: