When is an investment accounted for by the equity method? Outline how to apply the equity method.

Question:

When is an investment accounted for by the equity method? Outline how to apply the equity method. Include in your answer how to record the purchase of the investment, the investor's proportion of the investee's net income, and receipt of a cash from the investee. Indicate how a gain or loss on the sale of the investment would be measured.
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...