medium · Financial Accounting accounting-cycle-financial-statements

In the 'Significant Influence' category of equity investments (20-50% ownership), how are dividends received by the investor accounted for under the Equity Method?

1. They are ignored entirely until the investment is sold.
2. They are recorded as an increase in the 'Investment' asset account.
3. They are recorded as a reduction in the 'Investment' asset account.
4. They are recorded as 'Dividend Revenue' on the Income Statement.

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