Answer:
Effective interest on June 30 on a 6% $60 million bond at 7% effective rate is $1,950,778 
The interest is treated in the books of account thus:
Debit interest expense     $1,950,778 
Credit Bond account                               $1,950,778   
Explanation:
The effective interest is computed using the below formula
Amount x Effective Rate (%) = Interest Expense
Amount=$55,736,520
Effective rate =7%/2 =3.5% semi-annually
Interest expense=$55,736,520*3.5%
Interest expense=$1,950,778