I keep reading everywhere that if you have a multilanguage site, where the same page appears in, say, French and English, then this is considered as duplicate content by google. It is written that using canonical link is the solution, but I do not understand how to use it in this case. Should I:

1. Choose either French URL or English URL to be the canonical (main) one, and where I will place the canonical link? If so, how do I decide which of the two URLs must be canonical? both languages are important to me and I want the content under both languages to be indexed by google and served to the user, depending on the language in which he searches.
2. OR should I place a canonical link on both French and English URLs? If so, then I do not understand the meaning of using the canonical link? In this case would both URLs be indexed, are both of them considered as "important" by google and not duplicates?

Also I read that link rel="alternate" can be used to indicate to google that, for example the French URL is the French-language equivalent of the English page. This makes sense and I understand how to use such links, but how are they combined with canonical links? Should I define both the canonical URL AND specify rel="alternate" in both URLs?

Could someone help me to clarify this, cause I'm stuck with this and can't seem to find a good-enough explanation in different sources.