Thermomagnetic convection and entropy analysis in a ferrofluid-filled cubical cavity, having a centrally placed cylindrical heat source is investigated numerically. The magnetic field is created by either three normal permanent magnets or two Halbach array magnets. The governing equations are solved using a finite-volume, primitive-variables method. Thermal energy interactions between the heat-generating cylindrical heat source and the fluid are visualized through magnetic field distribution, velocity contours, velocity vectors, static temperature, and heat flux vectors. Also, a volumetric entropy generation analysis has been performed for understanding the quality of heat transfer and evaluating the thermodynamic merit of the heat-dissipation system. Results indicate that there is a considerable enhancement of cooling with both the magnetic arrangements. Parametric study shows that the arrangement with a double-Halbach array yields a slightly better overall performance compared to the one with three normal permanent magnets. Although the heat transfer is found to increase with increasing magnetic field strength, strong advection leads to a higher entropy generation at a large field. An intermediate magnetic Nusselt number is found to provide the optimal cooling amongst the investigated cases.