Write a paragraph explaining why unearned revenues are liabilities instead of revenues. In your explanation, use the following actual example: Maclean's magazine collects cash from subscribers in advance and later delivers magazines to subscribers over a one-year period. Explain what happens to the unearned subscription revenue over the course of a year as Maclean's delivers magazines to subscribers. Into what account does the unearned subscription revenue go as Maclean's delivers magazines?

Give the journal entries that Maclean's would make to:

a. Collect \(\$ 40,000\) of subscription revenue in advance.

b. Record earning \(\$ 10,000\) of subscription revenue.