diff --git a/CHANGELOG.md b/CHANGELOG.md
index 7b7eb3a52..5f393f11a 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -74,6 +74,10 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
   `mina-node-native` ([#1549](https://github.com/o1-labs/mina-rust/pull/1549))
 - **CI**: add a step in tests to run the unit/integration tests of the package
   `mina-node-native` ([#1549](https://github.com/o1-labs/mina-rust/pull/1549))
+- **Tests**: add account creation test cases for payment and coinbase
+  transactions, verifying correct handling of account creation fees during
+  the first pass of transaction application
+  ([#1581](https://github.com/o1-labs/mina-rust/pull/1581))
 - **tools**: remove stack allocation from tools
   ([#1576](https://github.com/o1-labs/mina-rust/pull/1576))
 
diff --git a/ledger/tests/test_transaction_logic_first_pass.rs b/ledger/tests/test_transaction_logic_first_pass.rs
index a28355148..9d5b63bdc 100644
--- a/ledger/tests/test_transaction_logic_first_pass.rs
+++ b/ledger/tests/test_transaction_logic_first_pass.rs
@@ -4,6 +4,7 @@
 //!
 //! Tests the first pass of two-phase transaction application, covering:
 //! - Successful payment transactions
+//! - Payment creating receiver account
 //! - Insufficient balance errors
 //! - Invalid nonce errors
 //! - Nonexistent fee payer errors
@@ -439,3 +440,126 @@ fn test_apply_payment_nonexistent_fee_payer() {
         "Alice's account should still not exist after transaction error"
     );
 }
+
+/// Test payment that creates a new receiver account.
+///
+/// When the receiver account doesn't exist, a new account is created
+/// automatically. The account creation fee is deducted from the payment amount,
+/// not from the sender's balance.
+///
+/// Ledger state: Sender's balance decreased by amount + fee, receiver account
+/// created with balance = amount - account_creation_fee.
+#[test]
+fn test_apply_payment_creates_receiver_account() {
+    let db = Database::create(15);
+    let mut ledger = Mask::new_root(db);
+
+    let alice_pk = mina_signer::PubKey::from_address(
+        "B62qmnY6m4c6bdgSPnQGZriSaj9vuSjsfh6qkveGTsFX3yGA5ywRaja",
+    )
+    .unwrap()
+    .into_compressed();
+    let bob_pk = mina_signer::PubKey::from_address(
+        "B62qjVQLxt9nYMWGn45mkgwYfcz8e8jvjNCBo11VKJb7vxDNwv5QLPS",
+    )
+    .unwrap()
+    .into_compressed();
+
+    // Create only Alice's account
+    let alice_id = AccountId::new(alice_pk.clone(), Default::default());
+    let alice_account = Account::create_with(alice_id.clone(), Balance::from_u64(5_000_000_000));
+    ledger
+        .get_or_create_account(alice_id.clone(), alice_account)
+        .unwrap();
+
+    let bob_id = AccountId::new(bob_pk.clone(), Default::default());
+
+    // Verify Bob's account does not exist before the transaction
+    assert!(
+        ledger.location_of_account(&bob_id).is_none(),
+        "Bob's account should not exist before transaction"
+    );
+
+    // Record initial state
+    let alice_location = ledger.location_of_account(&alice_id).unwrap();
+    let alice_before = ledger.get(alice_location).unwrap();
+    let initial_alice_balance = alice_before.balance;
+    let initial_alice_nonce = alice_before.nonce;
+    let initial_alice_receipt_hash = alice_before.receipt_chain_hash;
+
+    let amount = 2_000_000_000; // 2 MINA
+    let fee = 10_000_000; // 0.01 MINA
+    let nonce = 0;
+    let payment = create_payment(&alice_pk, &bob_pk, amount, fee, nonce);
+
+    let constraint_constants = &test_constraint_constants();
+    let account_creation_fee = constraint_constants.account_creation_fee; // 1 MINA
+
+    let state_view = ProtocolStateView {
+        snarked_ledger_hash: Fp::zero(),
+        blockchain_length: Length::from_u32(0),
+        min_window_density: Length::from_u32(0),
+        total_currency: Amount::zero(),
+        global_slot_since_genesis: Slot::from_u32(0),
+        staking_epoch_data: dummy_epoch_data(),
+        next_epoch_data: dummy_epoch_data(),
+    };
+    let result = apply_transaction_first_pass(
+        constraint_constants,
+        Slot::from_u32(0),
+        &state_view,
+        &mut ledger,
+        &Transaction::Command(UserCommand::SignedCommand(Box::new(payment))),
+    );
+
+    assert!(result.is_ok());
+
+    // Verify Alice's balance decreased by fee + payment amount
+    let alice_location = ledger.location_of_account(&alice_id).unwrap();
+    let alice_after = ledger.get(alice_location).unwrap();
+    let expected_alice_balance = initial_alice_balance
+        .sub_amount(Amount::from_u64(fee))
+        .unwrap()
+        .sub_amount(Amount::from_u64(amount))
+        .unwrap();
+    assert_eq!(
+        alice_after.balance, expected_alice_balance,
+        "Alice's balance should decrease by fee + payment amount"
+    );
+
+    // Verify Alice's nonce incremented
+    assert_eq!(
+        alice_after.nonce,
+        initial_alice_nonce.incr(),
+        "Alice's nonce should be incremented"
+    );
+
+    // Verify Alice's receipt chain hash updated
+    assert_ne!(
+        alice_after.receipt_chain_hash, initial_alice_receipt_hash,
+        "Alice's receipt chain hash should be updated"
+    );
+
+    // Verify Bob's account was created
+    let bob_location = ledger.location_of_account(&bob_id);
+    assert!(
+        bob_location.is_some(),
+        "Bob's account should now exist after transaction"
+    );
+
+    // Verify Bob's balance is payment amount minus account creation fee
+    let bob_location = bob_location.unwrap();
+    let bob_after = ledger.get(bob_location).unwrap();
+    let expected_bob_balance = Balance::from_u64(amount - account_creation_fee);
+    assert_eq!(
+        bob_after.balance, expected_bob_balance,
+        "Bob's balance should be payment amount minus account creation fee"
+    );
+
+    // Verify Bob's nonce is 0 (new account)
+    assert_eq!(
+        bob_after.nonce,
+        Nonce::zero(),
+        "Bob's nonce should be 0 for new account"
+    );
+}
diff --git a/ledger/tests/test_transaction_logic_first_pass_coinbase.rs b/ledger/tests/test_transaction_logic_first_pass_coinbase.rs
index c2754517b..11d881f51 100644
--- a/ledger/tests/test_transaction_logic_first_pass_coinbase.rs
+++ b/ledger/tests/test_transaction_logic_first_pass_coinbase.rs
@@ -1,11 +1,12 @@
 //! Tests for apply_transaction_first_pass with coinbase transactions
 //!
-//! Run with: cargo test --test test_transaction_logic_first_pass_coinbase
+//! Run with: cargo test --test test_transaction_logic_first_pass_coinbase --release
 //!
 //! Tests the first pass of two-phase transaction application for coinbase
 //! rewards, covering:
 //! - Successful coinbase without fee transfer
 //! - Successful coinbase with fee transfer to different account
+//! - Coinbase with fee transfer to nonexistent account (creates account)
 //! - Coinbase with fee transfer to same account (fee transfer should be
 //!   removed)
 //! - Coinbase creating a new account
@@ -228,6 +229,120 @@ fn test_apply_coinbase_with_fee_transfer() {
     );
 }
 
+/// Test coinbase with fee transfer to a nonexistent account.
+///
+/// The coinbase receiver exists, but the fee transfer receiver doesn't exist.
+/// The fee transfer should create the receiver account, deducting the account
+/// creation fee from the fee transfer amount.
+///
+/// Ledger state:
+/// - Coinbase receiver gets coinbase_amount - fee_transfer_amount
+/// - Fee transfer receiver account created with fee_transfer_amount -
+///   account_creation_fee
+#[test]
+fn test_apply_coinbase_with_fee_transfer_creates_account() {
+    let mut ledger = create_test_ledger();
+
+    let alice_pk = mina_signer::PubKey::from_address(
+        "B62qmnY6m4c6bdgSPnQGZriSaj9vuSjsfh6qkveGTsFX3yGA5ywRaja",
+    )
+    .unwrap()
+    .into_compressed();
+    let bob_pk = mina_signer::PubKey::from_address(
+        "B62qjVQLxt9nYMWGn45mkgwYfcz8e8jvjNCBo11VKJb7vxDNwv5QLPS",
+    )
+    .unwrap()
+    .into_compressed();
+
+    let alice_id = AccountId::new(alice_pk.clone(), Default::default());
+    let bob_id = AccountId::new(bob_pk.clone(), Default::default());
+
+    // Verify Bob's account does not exist before the transaction
+    assert!(
+        ledger.location_of_account(&bob_id).is_none(),
+        "Bob's account should not exist before transaction"
+    );
+
+    // Record Alice's initial state
+    let alice_location = ledger.location_of_account(&alice_id).unwrap();
+    let alice_before = ledger.get(alice_location).unwrap();
+    let initial_alice_balance = alice_before.balance;
+
+    // Create a coinbase of 720 MINA to Alice with a 10 MINA fee transfer to Bob
+    // (who doesn't exist yet)
+    let coinbase_amount = Amount::from_u64(720_000_000_000);
+    let fee_transfer_amount = Fee::from_u64(10_000_000_000);
+    let fee_transfer = CoinbaseFeeTransfer::create(bob_pk.clone(), fee_transfer_amount);
+    let coinbase = Coinbase::create(coinbase_amount, alice_pk.clone(), Some(fee_transfer)).unwrap();
+
+    let constraint_constants = &test_constraint_constants();
+    let state_view = ProtocolStateView {
+        snarked_ledger_hash: Fp::zero(),
+        blockchain_length: Length::from_u32(0),
+        min_window_density: Length::from_u32(0),
+        total_currency: Amount::zero(),
+        global_slot_since_genesis: Slot::from_u32(0),
+        staking_epoch_data: dummy_epoch_data(),
+        next_epoch_data: dummy_epoch_data(),
+    };
+    let result = apply_transaction_first_pass(
+        constraint_constants,
+        Slot::from_u32(0),
+        &state_view,
+        &mut ledger,
+        &Transaction::Coinbase(coinbase),
+    );
+
+    assert!(result.is_ok());
+
+    // Verify Bob's account was created
+    let bob_location = ledger.location_of_account(&bob_id);
+    assert!(
+        bob_location.is_some(),
+        "Bob's account should exist after transaction"
+    );
+
+    // Verify ledger state changes
+    let alice_location = ledger.location_of_account(&alice_id).unwrap();
+    let alice_after = ledger.get(alice_location).unwrap();
+    let bob_account = ledger.get(bob_location.unwrap()).unwrap();
+
+    // Verify Alice's balance increased by (coinbase amount - fee transfer amount)
+    let coinbase_after_fee_transfer = coinbase_amount
+        .checked_sub(&Amount::of_fee(&fee_transfer_amount))
+        .unwrap();
+    let expected_alice_balance = initial_alice_balance
+        .add_amount(coinbase_after_fee_transfer)
+        .unwrap();
+    assert_eq!(
+        alice_after.balance, expected_alice_balance,
+        "Alice's balance should increase by coinbase minus fee transfer"
+    );
+
+    // Verify Bob's balance equals fee transfer amount minus account creation fee
+    let account_creation_fee = constraint_constants.account_creation_fee;
+    let expected_bob_balance = Balance::from_u64(
+        Amount::of_fee(&fee_transfer_amount)
+            .as_u64()
+            .saturating_sub(account_creation_fee),
+    );
+    assert_eq!(
+        bob_account.balance, expected_bob_balance,
+        "Bob's balance should equal fee transfer minus account creation fee"
+    );
+
+    // Verify nonces
+    assert_eq!(
+        alice_after.nonce, alice_before.nonce,
+        "Alice's nonce should remain unchanged"
+    );
+    assert_eq!(
+        bob_account.nonce,
+        Nonce::zero(),
+        "Bob's nonce should be 0 for new account"
+    );
+}
+
 /// Test coinbase with fee transfer to the same account.
 ///
 /// When the coinbase receiver and fee transfer receiver are the same, the fee