Eagle Moving Company purchased a new moving van on October 1, 1998. The cash price of the new van was \(\$ 33,750\), and the company received a trade-in allowance of \(\$ 5,600\) for a 1996 model. The balance was paid in cash. The 1996 model had been acquired on January 1, 1996, at a cost of \(\$ 22,500\). Depreciation has been recorded through December 31, 1997, on a straight-line basis, with three years of expected useful life and no expected salvage value.

Prepare journal entries to update the depreciation and to record the exchange of the moving vans.