diff --git a/erpnext/accounts/doctype/payment_entry/payment_entry.js b/erpnext/accounts/doctype/payment_entry/payment_entry.js
index 79a8f2b78a9..50bfbd3ea16 100644
--- a/erpnext/accounts/doctype/payment_entry/payment_entry.js
+++ b/erpnext/accounts/doctype/payment_entry/payment_entry.js
@@ -11,9 +11,8 @@ frappe.ui.form.on('Payment Entry', {
 	},
 
 	setup: function(frm) {
-		var party_account_type = frm.doc.party_type=="Customer" ? "Receivable" : "Payable";
-
 		frm.set_query("paid_from", function() {
+			var party_account_type = frm.doc.party_type=="Customer" ? "Receivable" : "Payable";
 			var account_types = in_list(["Pay", "Internal Transfer"], frm.doc.payment_type) ?
 				["Bank", "Cash"] : party_account_type;
 
@@ -35,6 +34,7 @@ frappe.ui.form.on('Payment Entry', {
 		});
 
 		frm.set_query("paid_to", function() {
+			var party_account_type = frm.doc.party_type=="Customer" ? "Receivable" : "Payable";
 			var account_types = in_list(["Receive", "Internal Transfer"], frm.doc.payment_type) ?
 	 			["Bank", "Cash"] : party_account_type;