Replace Windows XP VM through Windows 7 VM

Sorry, I cannot find a clear solution how to achieve what I want to do.
My PC: Mac OSX 10.9.2 2.8 GHz; Intel Core i7;16 GB DD3; Parallels 9 for Mac Build 9.0.2417 (Revision 979618)
I'm using Parallels for many years with Windows XP Pro as VM with great satisfaction.
I now like to stop using XP because Microsoft will end the maintenance.
I have bought an original Windows 7 Home Premium w/SP1 32 bits OEM DVD and like to install this as VM.
Of course I will make a backup of imported files and will new install the programs that I need to use in Windows 7.

How do I have to do this in the right way ?
I have read how to remove XP as VM, Can I than after that install Windows 7 from the DVD ?
Are there some special things I have to take care of or should have to take in mind ?

The installation of Windows XP went with no problems !

Thank you for your advise,
Leo.

 

File > New

You can actually keep both VMs.