diff --git a/erpnext/accounts/doctype/payment_entry/test_payment_entry.py b/erpnext/accounts/doctype/payment_entry/test_payment_entry.py
index c8e096e65ac..a24b8fad1bf 100644
--- a/erpnext/accounts/doctype/payment_entry/test_payment_entry.py
+++ b/erpnext/accounts/doctype/payment_entry/test_payment_entry.py
@@ -246,6 +246,47 @@ class TestPaymentEntry(ERPNextTestSuite):
 		outstanding_amount = flt(frappe.db.get_value("Sales Invoice", pi.name, "outstanding_amount"))
 		self.assertEqual(outstanding_amount, 0)
 
+	def test_pay_multiple_purchase_invoices_in_one_entry(self):
+		pi1 = make_purchase_invoice()  # outstanding 250
+		pi2 = make_purchase_invoice()  # outstanding 250
+
+		pe = get_payment_entry("Purchase Invoice", pi1.name, bank_account="_Test Cash - _TC")
+		pe.append(
+			"references",
+			{
+				"reference_doctype": "Purchase Invoice",
+				"reference_name": pi2.name,
+				"total_amount": pi2.grand_total,
+				"outstanding_amount": pi2.outstanding_amount,
+				"allocated_amount": pi2.outstanding_amount,
+			},
+		)
+		pe.paid_amount = pe.references[0].allocated_amount + pe.references[1].allocated_amount
+		pe.insert()
+		pe.submit()
+
+		self.assertEqual(pe.total_allocated_amount, 500)
+		self.assertEqual(frappe.db.get_value("Purchase Invoice", pi1.name, "outstanding_amount"), 0)
+		self.assertEqual(frappe.db.get_value("Purchase Invoice", pi2.name, "outstanding_amount"), 0)
+
+	def test_unallocated_amount_on_overpaid_purchase_payment(self):
+		pi = make_purchase_invoice()  # outstanding 250
+
+		pe = get_payment_entry("Purchase Invoice", pi.name, bank_account="_Test Cash - _TC")
+		pe.paid_amount = pe.references[0].allocated_amount + 200  # overpay -> 200 advance
+		pe.received_amount = pe.paid_amount
+		pe.insert()
+
+		self.assertEqual(pe.unallocated_amount, 200)
+
+	def test_overallocation_against_purchase_invoice_throws(self):
+		pi = make_purchase_invoice()  # outstanding 250
+
+		pe = get_payment_entry("Purchase Invoice", pi.name, bank_account="_Test Cash - _TC")
+		pe.references[0].allocated_amount += 100  # 350 > 250 outstanding
+		pe.paid_amount = pe.references[0].allocated_amount
+		self.assertRaises(frappe.ValidationError, pe.insert)
+
 	def test_payment_against_sales_invoice_to_check_status(self):
 		si = create_sales_invoice(
 			customer="_Test Customer USD",