The short answer
He watched Borgia for three and a half months in the winter of 1502, and on 26 December reported the body of Borgia's own governor lying in two pieces in the square at Cesena. In The Prince he made it a lesson.
On the day
He could hardly get near Borgia, who saw almost nobody. He was broke, feverish, and asking to be recalled. On 23 December he reported that Ramiro de Lorqua, Borgia's governor of the Romagna, had been confined at the bottom of the tower, and that it was feared he would be sacrificed to the people. Three days later: Messer Ramiro was found to-day cut into two pieces in the public square, and his body still remains there.
Why, he wrote, was not precisely known, beyond the duke's pleasure and what the man deserved.
Eleven years later
In chapter 7 of The Prince the event has a design in three moves. Borgia put the province under a cruel and energetic governor, who pacified it. Then he set up a civil court, and, wanting it known that if any cruelties had been practised, they had not originated with him, had the governor killed and displayed with a block of wood and a bloody cutlass beside him. The people were left satisfied and stunned at one and the same time.
Delegate the violence; bring in the law; punish the delegate. The reason came afterwards. He may have learned it at the court; he may have supplied it. The record does not say which.
Did he admire Borgia?
In the same chapter he says he can find nothing to blame in Borgia's actions. He also opens the account by saying Borgia won his state by his father's good fortune and lost it when that fortune failed, which is exactly what he had written from Borgia's court in 1502, before any of it had happened.