At the close of each quarter, a journal voucher shall be prepared in the amount of the quarterly charge indicated in the insurance register, for entry in the general ledger, debiting the applicable development cost or operating expense account and crediting account 1211, Prepaid Insurance. The quarterly charge is equivalent to the expired portion of the amount of the premium for each policy which was originally charged to account 1211. The portion of the premium charged to account 1212, Anticipated Returnable Premiums, shall not be charged to cost or expense, except as noted in section 1642-7.5. For example, if the amount of the original premium for a three-year mutual policy is $12,000 and the estimated expense is $7,200, account 1212, Anticipated Premium Requirements, would be charged with $7,200 which would be written off to cost or expense at the rate of $600 per quarter. The charge to cost or expense for the first and last months of a policy effective on other than the first day of the month shall be computed as one-thirtieth of the monthly charge for each day the policy was in effect exclusive of the 31st day of any month and including the two extra days if the first month is February, (one extra day in leap years). Where a policy is cancelled, the balance due the local agency for the unexpired portion of the premium is to be transferred from account 1211 to account 1129, Sundry Accounts Receivable.