Interest paid on loan taken from IMF will be recorded in ________ side of ________ account.
Interest paid on loan taken from IMF will be recorded in ________ side of ________ account.
Solution
✅ Correct Option: 2
Interest paid on a loan is an income payment (factor income going abroad), which falls under the current account as investment income. Since it is a payment going out of the country, it is recorded on the debit side. Hence interest paid on an IMF loan is recorded on the debit side of the current account.
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