Microsoft, Inc. has 20% ownership in Apple, Inc. as an investment; however, they gave up significant rights as a shareholder and do not have the ability to significantly influence, which of the following is true?

1. Despite the 20% ownership, ABC must have the ability to significantly influence; therefore, they cannot use the equity method.
2. Even though Microsoft does not have the ability to significantly influence, 20% ownership means that they have to use the equity method.
3. Microsoft must use the consolidation method
4. Microsoft does not have to record this investment on their books since 20% is immaterial.