Answer
Adjustment is done to reduce an overstated liability and understated revenue that occurs due to the unearned revenue. In order to do so, liabilities are debited and revenue is credited.
Work Step by Step
Unearned revenue refers to the fact that payment has occurred before revenue has been earned. The money from this is put into a liability account. As the period progresses, the company will provide the service and earn a revenue and reduce its liability (the unearned revenue. Since it is impractical to constantly calculate the amount of revenue gained on a daily basis, this is done towards the end of the accounting period and results in the correction of a pre-adjustment overstated liability and understated revenue. Hence we find that liabilities are debited (decreased) and revenue is credited (increased).