diff --git a/hrms/hr/doctype/full_and_final_statement/full_and_final_statement.py b/hrms/hr/doctype/full_and_final_statement/full_and_final_statement.py
index dd1a4ba2e6..82a2deeff8 100644
--- a/hrms/hr/doctype/full_and_final_statement/full_and_final_statement.py
+++ b/hrms/hr/doctype/full_and_final_statement/full_and_final_statement.py
@@ -6,6 +6,8 @@
 from frappe.model.document import Document
 from frappe.utils import flt, get_link_to_form, today
 
+from hrms.hr.doctype.full_and_final_statement.full_and_final_statement_loan_utils import process_loan_accrual
+
 
 class FullandFinalStatement(Document):
 	def before_insert(self):
@@ -22,6 +24,9 @@ def before_submit(self):
 		self.validate_settlement("receivables")
 		self.validate_assets()
 
+	def on_submit(self):
+		process_loan_accrual(self)
+
 	def on_cancel(self):
 		self.ignore_linked_doctypes = ("GL Entry",)
 
diff --git a/hrms/hr/doctype/full_and_final_statement/full_and_final_statement_loan_utils.py b/hrms/hr/doctype/full_and_final_statement/full_and_final_statement_loan_utils.py
new file mode 100644
index 0000000000..50603e5449
--- /dev/null
+++ b/hrms/hr/doctype/full_and_final_statement/full_and_final_statement_loan_utils.py
@@ -0,0 +1,78 @@
+# Copyright (c) 2023, Frappe Technologies Pvt. Ltd. and Contributors
+# License: GNU General Public License v3. See license.txt
+
+from typing import TYPE_CHECKING
+
+import frappe
+from frappe import _
+
+from hrms.payroll.doctype.salary_slip.salary_slip_loan_utils import if_lending_app_installed
+
+if TYPE_CHECKING:
+	from hrms.payroll.doctype.full_and_final_statement.full_and_final_statement import FullandFinalStatement
+
+
+@if_lending_app_installed
+def process_loan_accrual(doc: "FullandFinalStatement"):
+	from lending.loan_management.doctype.loan_interest_accrual.loan_interest_accrual import (
+		make_loan_interest_accrual_entry,
+	)
+	from lending.loan_management.doctype.loan_repayment.loan_repayment import (
+		calculate_amounts,
+		create_repayment_entry,
+		get_pending_principal_amount,
+	)
+
+	loan_receivables = []
+	for receivable in doc.receivables:
+		if receivable.component != "Loan":
+			continue
+
+		loan_receivables.append(receivable.reference_document)
+
+	loan_receivables = list(set(loan_receivables))
+
+	for loan in loan_receivables:
+		loan_doc = frappe.get_doc("Loan", loan)
+		loan_repayment_schedule = frappe.get_doc("Loan Repayment Schedule", {"loan": loan, "docstatus": 1})
+		if loan_repayment_schedule.repayment_schedule:
+			amounts = []
+			for repayment_schedule in loan_repayment_schedule.repayment_schedule:
+				amounts = calculate_amounts(loan, doc.transaction_date, "Normal Repayment")
+				pending_principal_amount = get_pending_principal_amount(loan_doc)
+				if not repayment_schedule.is_accrued:
+					args = frappe._dict(
+						{
+							"loan": loan,
+							"applicant_type": loan_doc.applicant_type,
+							"applicant": loan_doc.applicant,
+							"interest_income_account": loan_doc.interest_income_account,
+							"loan_account": loan_doc.loan_account,
+							"pending_principal_amount": amounts["pending_principal_amount"],
+							"payable_principal": repayment_schedule.principal_amount,
+							"interest_amount": repayment_schedule.interest_amount,
+							"total_pending_interest_amount": pending_principal_amount,
+							"penalty_amount": amounts["penalty_amount"],
+							"posting_date": doc.transaction_date,
+							"repayment_schedule_name": repayment_schedule.name,
+							"accrual_type": "Regular",
+							"due_date": doc.transaction_date,
+						}
+					)
+					make_loan_interest_accrual_entry(args)
+					frappe.db.set_value("Repayment Schedule", repayment_schedule.name, "is_accrued", 1)
+
+			repayment_entry = create_repayment_entry(
+				loan,
+				doc.employee,
+				doc.company,
+				doc.transaction_date,
+				loan_doc.loan_product,
+				"Normal Repayment",
+				amounts["interest_amount"],
+				amounts["pending_principal_amount"],
+				receivable.amount,
+			)
+
+			repayment_entry.save()
+			repayment_entry.submit()