Welcome to a constant problem in leadership: Fraternization.
One of the constant problems you'll run into is finding the line between being the friend and being the boss; you should look at it that your friend shouldn't try and take advantage of your position, but that you'll look out for him. You have things that need to be accomplished, and he's in your formal chain of command on the lower end. You can delegate, but make sure your other subordinates know that they're on equal standing as your friend. If he does try and take advantage of you being his new boss, he isn't being a good friend and you should council him (not FIRE him, he should really mess up before that happens). Just make sure there's a mutual respect for positions between the two of you, and it should be fine.
On another note...if he was going for the same position that you were, and you were selected and he wasn't, that might cause not only a rift between the two of you but maybe a sort of resentment against you. Squash it. Part of being a leader is being able to advance your subordinates, not keeping them down. Bring him up with you.