How to create encrypted disk image?

In Disk Utility, I select to create a new image that is password protected. I'm prompted to save and give the image a password. It never ask for the size and starts "Reading whole disk". I don't want to encrypt my entire disk. This image might only be 5MB.
What steps do I take to create a DMG that is about 5MB and password protected?

Rename it in the Finder as you would any other item. If needed, choose Get Info from the File menu when the mounted image is selected in the sidebar.
(57123)

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