diff --git a/app/models/time_entry.rb b/app/models/time_entry.rb
index 130f398f4..9deb06f95 100644
--- a/app/models/time_entry.rb
+++ b/app/models/time_entry.rb
@@ -97,7 +97,7 @@ class TimeEntry < ActiveRecord::Base
   def initialize(attributes=nil, *args)
     super
     if new_record? && self.activity.nil?
-      if default_activity = TimeEntryActivity.default
+      if default_activity = TimeEntryActivity.default(self.project)
         self.activity_id = default_activity.id
       end
       self.hours = nil if hours == 0
diff --git a/app/models/time_entry_activity.rb b/app/models/time_entry_activity.rb
index ed09e7df7..f02ffac80 100644
--- a/app/models/time_entry_activity.rb
+++ b/app/models/time_entry_activity.rb
@@ -22,6 +22,15 @@ class TimeEntryActivity < Enumeration
 
   OptionName = :enumeration_activities
 
+  def self.default(project=nil)
+    default_activity = super()
+    if project.nil? || project.activities.blank? || project.activities.include?(default_activity)
+      return default_activity
+    end
+
+    project.activities.find_by(parent_id: default_activity.id)
+  end
+
   def option_name
     OptionName
   end
diff --git a/test/unit/time_entry_activity_test.rb b/test/unit/time_entry_activity_test.rb
index 9a338b4ce..91811dab0 100644
--- a/test/unit/time_entry_activity_test.rb
+++ b/test/unit/time_entry_activity_test.rb
@@ -131,4 +131,16 @@ class TimeEntryActivityTest < ActiveSupport::TestCase
     assert_include activity, project.activities
     assert_include TimeEntryActivity.find(9), project.activities
   end
+
+  def test_default_should_return_default_activity_if_default_activity_is_included_in_the_project_activities
+    project = Project.find(1)
+    assert_equal TimeEntryActivity.default(project).id, 10
+  end
+
+  def test_default_should_return_project_specific_default_activity_if_default_activity_is_not_included_in_the_project_activities
+    project = Project.find(1)
+    project_specific_default_activity = TimeEntryActivity.create!(name: 'Development', parent_id: 10, project_id: project.id, is_default: false)
+    assert_not_equal TimeEntryActivity.default(project).id, 10
+    assert_equal TimeEntryActivity.default(project).id, project_specific_default_activity.id
+  end
 end
diff --git a/test/unit/time_entry_test.rb b/test/unit/time_entry_test.rb
index 355a1d8fc..d09b4a3a8 100644
--- a/test/unit/time_entry_test.rb
+++ b/test/unit/time_entry_test.rb
@@ -125,6 +125,19 @@ class TimeEntryTest < ActiveSupport::TestCase
     end
   end
 
+  def test_activity_id_should_default_activity_id
+    project = Project.find(1)
+    default_activity = TimeEntryActivity.find(10)
+    entry = TimeEntry.new(project: project)
+    assert_equal entry.activity_id, default_activity.id
+
+    # If there are project specific activities
+    project_specific_default_activity = TimeEntryActivity.create!(name: 'Development', parent_id: 10, project_id: project.id, is_default: false)
+    entry = TimeEntry.new(project: project)
+    assert_not_equal entry.activity_id, default_activity.id
+    assert_equal entry.activity_id, project_specific_default_activity.id
+  end
+
   def test_should_accept_future_dates
     entry = TimeEntry.generate
     entry.spent_on = User.current.today + 1