Tops Ltd. has decided to use the revaluation model for its factory building and the cost model for its manufacturing equipment. Tops Ltd also owns additional land that it does not occupy but holds as an investment. Assume that at the end of 2010, the market values of each asset exceeded its original cost. On its Balance Sheet, the company categorizes its non-current assets into PP & E and Investment Property.

Assume the total cost of the manufacturing equipment on 1 October 2010, the date used for the start of depreciation, was $60,000. There is no estimated residual value, and the useful life for purposes of straight-line depreciation is 20 years. On March 31, 2011, a component part of the equipment with an allocated cost of $12,000 and a 20 year useful life was replaced with a better component costing $15,000. A trade-in allowance of $8,000 was granted for the old component, and the difference was paid in cash. Depreciation had last been recorded on December 31, 2010.

Required:

Prepare all necessary journal entries related to the event on March 31, 2011.