Choice "B" is correct. Common stock that contains an unconditional redemption feature should be reported on the issuer's books as a liability on the date of issuance because there is an obligation of a cash outflow in the future that the company has no ability to prevent.Choice "c" is incorrect. Cumulative preferred stock is considered equity and would not be recorded on the issuer's books as a liability on the date of issuance.Choice "a" is incorrect. Preferred stock that is convertible to common stock five years from the issue date is recorded in the equity section of the balance sheet and not as a liability on the issuer's books on the date of issuance.Choice "d" is incorrect. Common stock that is issued at 5% discount as part of an employee share purchase plan is not recorded as a liability on the issuer's books on the date of issuance.