There are no rejected papers
Assuming that you're doing proper research with no shenanigans, there are no rejected papers - there are just papers that aren't accepted yet, either because they need some more work or they had been submitted to a place that's wrong for that paper (either focus or ranking-wise).
Yes, generally a paper that's awaiting review with unknown status is considered more valuable than a paper with a known negative review, but 'Rejected' is a status of the editor/journal workflow, not generally a status in the workflow of authoring a paper.
Report on what you do or did or are doing
For a potential advisor, the current "paper count" isn't as important as knowing how you handle your research work. What you need to do here is (a) take appropriate actions depending on what exactly your reviews said, which in some cases might even mean simply resubmitting the exact same paper to a less selective venue; and (b) report to the advisor on what you did/are doing and what is the current status of the paper.
"Rejected" is a meaningful status only if the review made you understand that the effort should be cancelled - otherwise it's just a limbo for a few days while you make a decision on how to proceed. When you report the paper status, it should be e.g. "submitted to the other journal", "rewrite of section Y as per reviewers suggestions", "ongoing extra experiments to clarify effect Z" or something like that. Of course, it also should be that way in practice.