diff --git a/integration_tests/payment_failure_test.go b/integration_tests/payment_failure_test.go
index f4c81fb..82e0285 100644
--- a/integration_tests/payment_failure_test.go
+++ b/integration_tests/payment_failure_test.go
@@ -90,8 +90,8 @@ func (suite *PaymentTestErrorsSuite) TestExternalFailingInvoice() {
 
 	//test an expired invoice
 	externalInvoice := lnrpc.Invoice{
-		Memo:  "integration tests: external pay from alice",
-		Value: int64(externalSatRequested),
+		Memo:   "integration tests: external pay from alice",
+		Value:  int64(externalSatRequested),
 		Expiry: 1,
 	}
 	invoice, err := suite.externalLND.AddInvoice(context.Background(), &externalInvoice)
@@ -148,10 +148,17 @@ func (suite *PaymentTestErrorsSuite) TestExternalFailingInvoice() {
 		fmt.Printf("Error when getting balance %v\n", err.Error())
 	}
 
-	// check if there are 3 transaction entries, with reversed credit and debit account ids
-	assert.Equal(suite.T(), 3, len(transactonEntries))
-	assert.Equal(suite.T(), transactonEntries[1].CreditAccountID, transactonEntries[2].DebitAccountID)
-	assert.Equal(suite.T(), transactonEntries[1].DebitAccountID, transactonEntries[2].CreditAccountID)
+	// check if there are 5 transaction entries:
+	//	- the incoming payment
+	//  - the outgoing payment
+	//  - the fee reserve + the fee reserve reversal
+	//  - the outgoing payment reversal
+	//  with reversed credit and debit account ids for payment 2/5 & payment 3/4
+	assert.Equal(suite.T(), 5, len(transactonEntries))
+	assert.Equal(suite.T(), transactonEntries[1].CreditAccountID, transactonEntries[4].DebitAccountID)
+	assert.Equal(suite.T(), transactonEntries[1].DebitAccountID, transactonEntries[4].CreditAccountID)
+	assert.Equal(suite.T(), transactonEntries[2].CreditAccountID, transactonEntries[3].DebitAccountID)
+	assert.Equal(suite.T(), transactonEntries[2].DebitAccountID, transactonEntries[3].CreditAccountID)
 	assert.Equal(suite.T(), transactonEntries[1].Amount, int64(externalSatRequested))
 	assert.Equal(suite.T(), transactonEntries[2].Amount, int64(externalSatRequested))
 	// assert that balance is the same
diff --git a/lib/service/invoices.go b/lib/service/invoices.go
index bc822cb..dbb572c 100644
--- a/lib/service/invoices.go
+++ b/lib/service/invoices.go
@@ -247,7 +247,16 @@ func (svc *LndhubService) HandleFailedPayment(ctx context.Context, invoice *mode
 		svc.Logger.Errorf("Could not open tx entry for updating failed payment:r_hash:%s %v", invoice.RHash, err)
 		return err
 	}
-	// add transaction entry with reverted credit/debit account id
+
+	//revert the fee reserve if necessary
+	err = svc.RevertFeeReserve(ctx, &entryToRevert, invoice, tx)
+	if err != nil {
+		sentry.CaptureException(err)
+		svc.Logger.Errorf("Could not revert fee reserve entry entry user_id:%v invoice_id:%v error %s", invoice.UserID, invoice.ID, err.Error())
+		return err
+	}
+
+	//revert the payment if necessary
 	entry := models.TransactionEntry{
 		UserID:          invoice.UserID,
 		InvoiceID:       invoice.ID,
@@ -264,13 +273,6 @@ func (svc *LndhubService) HandleFailedPayment(ctx context.Context, invoice *mode
 		return err
 	}
 
-	err = svc.RevertFeeReserve(ctx, &entryToRevert, tx)
-	if err != nil {
-		sentry.CaptureException(err)
-		svc.Logger.Errorf("Could not revert fee reserve entry entry user_id:%v invoice_id:%v error %s", invoice.UserID, invoice.ID, err.Error())
-		return err
-	}
-
 	invoice.State = common.InvoiceStateError
 	if failedPaymentError != nil {
 		invoice.ErrorMessage = failedPaymentError.Error()
@@ -337,12 +339,12 @@ func (svc *LndhubService) InsertTransactionEntry(ctx context.Context, invoice *m
 	return entry, err
 }
 
-func (svc *LndhubService) RevertFeeReserve(ctx context.Context, entry *models.TransactionEntry, tx bun.Tx) (err error) {
+func (svc *LndhubService) RevertFeeReserve(ctx context.Context, entry *models.TransactionEntry, invoice *models.Invoice, tx bun.Tx) (err error) {
 	if entry.FeeReserve != nil {
 		entryToRevert := entry.FeeReserve
 		feeReserveRevert := models.TransactionEntry{
 			UserID:          entryToRevert.UserID,
-			InvoiceID:       entryToRevert.ID,
+			InvoiceID:       invoice.ID,
 			CreditAccountID: entryToRevert.DebitAccountID,
 			DebitAccountID:  entryToRevert.CreditAccountID,
 			Amount:          entryToRevert.Amount,
@@ -394,7 +396,7 @@ func (svc *LndhubService) HandleSuccessfulPayment(ctx context.Context, invoice *
 	}
 
 	//revert the fee reserve entry
-	err = svc.RevertFeeReserve(ctx, &parentEntry, tx)
+	err = svc.RevertFeeReserve(ctx, &parentEntry, invoice, tx)
 	if err != nil {
 		tx.Rollback()
 		sentry.CaptureException(err)