Write a paragraph to explain why unearned revenues are liabilities instead of revenues. In your explanation, use the following actual example: The Globe and Trail, a national newspaper, collects cash from subscribers in advance and later delivers newspapers to subscribers over a one-year period. Explain what happens to the unearned revenue over the course of a year as The Globe and Trail delivers papers to subscribers. Into what account does the earned subscription revenue go as The Globe and Trail delivers papers? Give the journal entries that The Globe and Trail would make to
(a) Collect $50,000 of subscription revenue in advance
(b) Record earning $50,000 of subscription revenue.
Include an explanation for each entry, as illustrated in the chapter.