E B Tax and Payable Automatic Offset Setup

Dear All

We have one ledger and 3 LE and Balancing Segment (415 / 416 / 417) assign to it.

We have enabled Automatic Offset Method (Balancing) in Payable option.

Below is high level Setup and testing.

Default AP liability company code 415
Default Bank account Company Code 416
Eb Tax Rate company code 416

The invoice / Payment testing looks good. But when we add tax code to invoice, the company code does not change and it expects the intercompany setup. Accounting entry looks as below

Item (BSV 417) Dr 100 Entered manually during testing.
Tax (BSV 416) Dr 10 Defaulted from Tax rate setup
Liability (BSV 417) Cr 110 The default liability code 415 is replaced by 417 based on Item