If it’s any consolation Sandra most of us who are caring/have cared for someone with dementia have been through this scenario ! My own Mum regularly saw squirrels in her grandfather clock - we eventually realised it was a trick of the light when a car would go by with it’s headlights on She would also insist that there were children downstairs - she lived in a ground floor flat. There were other things as well - it got to the point where we couldn’t watch “Escape to the Country” as she believed we were living in whichever house they were viewing and she was a “city” girl wasn’t happy about being stranded out in the country. I can laugh about it now, but at the time it was pretty scary !
She also had auditory hallucinations - would hear the choir/tenors singing regularly. We lived nowhere near a church so no choir ! Turned out she had tinnitus and the choir/tenors she heard were her brain trying to make sense of the noises from the tinnitus.
Like Londonbound has said distraction is the best way to go.
My husband told me that grandad was having a lowdown on his bed in the nursing home. He never knew his grandad,.I think I would have turned a whiter shade of pale if he had been as hubby was 73 at the time! I just replied Ok love, we will watch the TV quietly for a while. He also saw our beloved long lost dog run into the room. I went along with it. The only time I would not agree, was if he said something awful had happened, like being trapped with rats, then I would say that he must have taken his medication late or similar and it’s caused a horrible dream. Fortunately he would accept my explanation. It’s very difficult to become step ahead. I did learn to be, most of the time.