Toronto Taxi Inc. owns a van that was purchased on January 1, 2011, for $45,000. The van has been depreciated using the straight-line method over 10 years and has a residual value of $5,000. On September 30, 2019, the company sold it for $7,000 cash and bought a new vehicle for $50,000 and signed a 4 percent note, payable in four equal annual installments on September 30 of each year, with the first payment due on September 30, 2020. The company made the fallowing additional payments in cash: $1,500 for a one-year insurance policy and $3,000 for preparation charges (i.e., registration, licence plate). The company depreciates the new van using the double-declining-balance method over five years. The new vehicle has an estimated residual value of $6,000.

Required:
1. Compute the gain or loss on the sale of the old van and prepare the journal entry to record this transaction.
2. Prepare the journal entries to record all the transactions that occurred on September 30, 2019.
3. Compute the amount of the annual installment on the note payable and prepare the journal entry to record the payment of the first installment.
4. Prepare the necessary adjusting entries at December 31, 2019, the end of the company's fiscal year.