Chapter 10, Problem 5QC

To determine

Significant interest investments:

Significant interest investments are the equity securities, where the investor holds in between 20% to 50% of the voting stock. These securities are reported as long-term assets in the balance sheet. These investments are accounted for using the Equity method.

To identify: The way in which the dividends received will be recorded by the investor company owning 25% of the voting stock of Company P.