During it's fiscal year, company P purchased 50,000 shares of voting stock of Company S for $1 million. Company S has 312,500 shares of voting stock outstanding. Company S had a profit of $156,250 for the current year. Both companies have the same fiscal year. Company S paid dividends of .50 per share during the year. What accounting method should be used by company P to account for this investment and why? Show the journal entires with explanations to record investment and make any adjustments necessary for Company S's profits and dividends.