Write a paragraph to explain why unearned revenues are liabilities instead of revenues. In your…

(Learning Objective 3: Explaining unearned revenues) Write a paragraph to explain why unearned revenues are liabilities instead of revenues. In your explanation, use the following actual example: The Wall Street Journal collects cash from subscribers in advance and later delivers newspapers to subscribers over a 1-year period. Explain what happens to the unearned revenue over the course of a year as The Wall Street Journal delivers papers to subscribers. Into what account does the earned subscription revenue go as The Wall Street Journal delivers papers? Give the journal entries that The Wall Street Journal would make to (a) collect $40,000 of subscription revenue in advance and (b) record earning $40,000 of subscription revenue. Include an explanation for each entry, as illustrated in the.

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