On January 1, 2013, Doe Company purchased 3,000 of the 10,000 common shares outstanding of Ray Company for $15 per share and obtained significant influence. Doe amortizes its patents over 10 years. Ray's December 31, 2012, condensed balance sheet is shown here:

Doe was unable to determine the fair value of Ray's identifiable net assets shown on the preceding balance sheet. It did, however, determine that Ray uses the straight-line method (no residual value) to depreciate its fixed assets and to amortize its patents over 20 years and 10 years, respectively. At the end of 2013, Ray disclosed the following condensed income statement and retained earnings statement for 2013:

Required:
Prepare all the 2013 journal entries that Doe should make related to this investment. Show and label all supporting calculations.

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Current assets Fixed assets (net) Patents (net) $50,000 30,000 70,000 $150,000 $ 10,000 Liabilities 100,000 Common stock, no par 40,000 Retained earnings $150,000 Revenues Expenses Operating income Extraordinary loss Net income 100,000 Beginning retained eamings $70,000 32,000 $102,000 0,000 $ 82,000 $ 40,000 2000 Ending retained earnings