In Its 2016 Annual Report to Shareholders,Bare Sturns Group Inc

question 141

Essay

In its 2016 annual report to shareholders,Bare Sturns Group Inc.disclosed the following:
On October 28,2016,the Company issued $475,000,000 aggregate principal amount of 9-1/4% Senior Notes Due 2021 ("Senior Notes")and $618,670,000 aggregate principal amount at maturity of 10-1/4% Senior Discount Notes Due 2021 ("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.

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Definitions:

Response Stereotyping

The assumption that individuals in certain roles will behave in a predictable manner based on societal stereotypes.

Placebo Effect

The phenomenon where individuals experience a perceived improvement in condition due to their expectation of treatment, rather than the treatment itself.

Experimenter Bias

A process where the researcher unintentionally influences the outcome of a study due to subjective preference or expectation.

Experimenters' Beliefs

The preconceived notions and expectations of researchers that can unintentionally influence the outcome of an experiment.