On July 1 ,2010 Spahn Co, pays $18,000 to Randle Insurance co. For 3year insurance contract. Both companies have fiscal years ending December 31. Prepare the journal entry on July 1 on and the adjusting entry on December 31 for Randle insurance Co

For the purchase of the policy the journal entry will be:
Debit Prepaid Insurance for 18,000
Credit Cash for 18,000

For the adjusting entry you need to calculate the monthly rate first, by taking $18,000 divided by 36 months, then calculate the number of months used, which is 6 months times the monthly rate to get the amount of interest used.
Your journal entry will be:
Debit Interest Expense for the amount calculated above
Credit Prepaid Insurance for the amount calculated above