Jurors in Donald Trump’s hush money trial heard for the first time how and why Michael Cohen’s reimbursement payment for the Stormy Daniels’ payment was entered as a legal expense.

Former Trump Organisation controller Jeffrey McConney testified on Monday (Tuesday AEDT) about conversations he had with the company’s longtime finance chief Allen Weisselberg in January 2017 about reimbursing Cohen for $196,000 ($US130,000) he’d paid to lawyer Keith Davidson, Daniels’ then-lawyer.

McConney said handwritten notes from Weisselberg detailed how much to reimburse Cohen for.

Former President Donald Trump speaks to reporters at Manhattan criminal court. (AP)

All expenses had to be entered in the general ledger with a category code, and “we were paying a lawyer,” McConney explained. So it was coded as such.

Prior to witness testimony, Trump was sanctioned a second time for violating a gag order barring him from publicly speaking about witnesses, jurors and others connected to the trial.

Judge Juan M. Merchan fined him $1500 and warned that going forward, additional violations could result in jail time.

The trial is in its 12th day.

Overall, prosecutors are inching further into those in Trump’s orbit, setting the stage for a deeper dive into what they say was a scheme to influence the 2016 presidential election by buying and burying negative stories about the then-candidate.

Cohen is the prosecution’s star witness and went to prison for the hush money scheme.

Trump has pleaded not guilty to 34 felony counts of falsifying business records.

The case is the first-ever criminal trial of a former US president and the first of four prosecutions of Trump to reach a jury.

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