Manny, the owner of the general store, extends credit to Mr. Johnson, a local farmer, so he can buy horse feed. Mr. Johnson's crop last year was damaged, so he does not have the money now but will after this year's harvest. Manny knows Mr. Johnson is an honest, hardworking man who always pays his debts, so he writes down the amount owed and expects to be repaid in full later. This is an early example of how credit is extended through an agreement to borrow now and repay later. Merchants now check credit histories to determine if someone has repaid past debts on time before lending to them.