In theory you should post expense of $1250 monthly. If you were simply paying the insurance company this amount each month or the net after a down payment you would expense the cost when paid (if cash basis) but since you are borrowing the money from a third party you are borrowing working capital to cover a one time charge that happens to cover two different tax years.
Thus as I started, you should book your insurance company bill in 1/12 increments. Pay the lender and post to Accounts Payable with the insurance company name (you need a name to post to AP). Periodically (monthly) "pay" the insurance invoice by applying any credit in AP
