A rental property should be on a schedule E. If it is not it will cause problems down the line. You can set up a Schedule C for management control, but the properties themselves should be on a Schedule E.
If the original air conditioner was not fully depreciated you will have to dispose of it as an asset. You will post the final value as zero and the reminder of the depreciation will flow into your return.
The replacement air conditioner should be setup as a new asset.
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