Bank register

Hello everyone !

I need your help:

I have a contractor that I loaned $1,000 to.

When I had to pay him for his week from my cash on hand account, which was $1,000. I deducted $100 so that the loan would be paid off.

To record this, I did the following:

1- I created the "Loan to Contractor" account and recorded the $1,000 I loaned him.
2- I recorded a bank deposit for $900 in the cash on hand account. (Because that's really what I'm going to pay him)
3- I created a journal entry for $1,000 as follows:

Contract Labor  $1,000
Cash on Hand                 $1,000

Since in reality your week was $1,000

3- I created a bank deposit from my contractor to the cash on hand account for $100 and in the account I put "Loan to Contractor".

And this way cash on hand is $0.00 and the Loan is $900.

I did it this way to record that I actually paid him $1,000, and then he is paying me back $100 to pay his loan.

Is it correct to do it this way?

Thank you very much!