Tracking notes payable and paying them

How do you track Notes Payable and payments thereon (i.e. Line of credit or even long term debt).  It looks to me like we have to set up the loaning bank as a vendor or other name. This then seems to track the payable in Accounts Payable (short term) when in truth we want the liability to show as Notes Payable on our balance sheet -

And if we do have a Notes Payable on our balance sheet - how do we show payment on that note except thru A/P??? We're confused - The way it seems to work (using A/P) means we'd have to book a lot of journal entries