What happens on the date of record regarding cash dividends?

On the date of record, there is no journal entry required because this date is simply the point at which the company identifies the shareholders who are entitled to receive the declared dividends. It is a crucial date for determining who will receive the dividend payments, but it does not involve any financial transaction or alteration of accounts that would necessitate a journal entry.

Prior to the date of record, the company would have declared the dividend, which is when the obligation to pay dividends is established, but the actual cash payment occurs later on the payment date. Hence, the date of record functions as an administrative benchmark rather than an event that affects the accounting records directly. This clarifies why no journal entry is made at this specific time.