Neumann Corporation issues convertible preferred stock that is mandatorily redeemable five years from the date of issuance. During the last two years that the preferred shares are outstanding, investors may convert each one share of preferred stock to two shares of common stock. Prior to conversion or redemption, the preferred shares should be classified on the balance sheet as:

The preferred shares should be classified on the balance sheet as equity. Equity is the residue after Liabilities are deducted from the Assets. They also represents owners investments in the company.

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mahak08 mahak08 · Answer 2 · 2021-11-25T20:26:57+01:00

The preferred shares should be recorded as equity on the balance sheet. After Liabilities are subtracted from Assets, Equity is the remaining amount. They also symbolize the company's investments by its owners.

About Equity:

The worth of a company's own shares is referred to as equity.

This is most commonly used in the context of a company's balance sheet, and its valuation is determined by a precise computation.

More exactly, equity is a company's total, liquid value less any outstanding loans or liabilities.

Understanding what this term signifies is critical to comprehending a company's finances.

For more information about equity refer to the link:

https://brainly.com/question/13278063