Stud Muffin Bakery prepares financial statements on an annual basis and has a December 31, 2017 year- end. On July 1, 2017, the bakery purchased a one-year insurance policy for $12,000 cash. The insurance policy covers July 1, 2017 to June 30, 2018.
a. How much does the insurance policy cost per month? 

b. How many months are between July 1, 2017 and December 31, 2017? 

c. Record the journal entry on July 1, 2017.
d. In order to prepare the annual financial statements, record the adjusting journal entry on December 31, 2017.

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July 1, 2017 Dec. 31, 2017 Sept. Nov. Sept. Nov. Jan. Mar. Mar. May Jan. May July July Feb. June Oct. Feb. Aug. Dec. Apr. Oct. Dec. Aug. Aprг. June 2017 2018 Insurance coverage July 1, 2017 to June 30, 2018