On July 1, 2016, Alpha Company purchased for $70,000, equipment having a service life of eight years and an estimated residual value of $10,000. Alpha has recorded depreciation of the equipment using the straight line method. On December 31, 2018, before making any annual adjusting entries, the equipment was exchanged for new machinery having a fair value of $32,500. The transaction has commercial substance. Use this information to prepare all General Journal entries (without explanation) required to record the events for December 31, 2018.