In Its 2018 Annual Report to Shareholders, Bare Sturns Group

Essay

In its 2018 annual report to shareholders, Bare Sturns Group Inc. disclosed the following:
On October 28, 2018, the Company issued $475,000,000 aggregate principal amount of 9-1/4% Senior Notes Due 2023 ("Senior Notes") and $618,670,000 aggregate principal amount at maturity of 10-1/4% Senior Discount Notes Due 2023 ("Senior Discount Notes" and collectively the "Notes") in a transaction not registered under the Securities Act in reliance upon an exemption from the registration requirements of the Securities Act. Gross proceeds from the offering amounted to $850,000,000. The discount on the Senior Discount Notes is being accreted under the effective interest method.
Explain the last sentence of the disclosure to clarify what accounting was necessary and why.