Q7: How do we account for a company when it actually pays the dividend to shareholders?
When the company pays the dividend to its shareholders, it will reduce Dividends payable (liability) and Cash (Asset) (if the dividend is paid in cash to shareholders):
DR Dividends Payable $85m
CR Cash $85m
Dividends paid to shareholders: reduces a liability (DR) and reduces an asset (CR)
Also, see Martin’s videos Accounting When Company Pays the Dividend