Priyanka,
If your settings are correct, then when you post retirement, there would be 2 documents that would created - the first document would post a loss of 3500 to BOTH ledgers (ledger independent posting). Another document should be posted realtime in the Non LL only for $200, which would make the loss in NLL = $3300. If you do not see a NLL document, execute ASKBN and that should show you the error for that document.
However, I think that your settings are a little awkward. Generally, area 1 is the area representing the leading ledger and not the non leading ledger.
Thanks
Asheesh Bhatia