how to delete a section of layer/path leaving a hole where it was?

[Kbee]

Hello

Wondered how to get rid of or delete the layers that you can see in pic 1...I need for the oblong portion and the little square to disappear from the file cutting a hole so to speak through where they are now so that the ai file will look like pic 2 when I group all layers together.

Beginner here so hopefully the above description makes sense, if not - I'LL TRY AGAIN.

THANKS

KB

Illustrator CS, OS X.3.9

[Kbee]

HERE'S AN ANSWER GIVEN -

With those two paths selected, go to the Pathfinder palette and click on Subtract From Shape Area (top row, second from left). Do this and the effect is live, meaning the paths ca still be independently edited. Hold Option when you click on the button (or lated click on Expand) and the effect is permanent.