Magento – Where to find Payment Log file in Magento 2

You referral link can only remove the code from payment list at check payment step.If you set error message at session (Mage::getSingleton('core/session')->addError(Mage::helper('payment')->__('Code is not avaliable.'))) on function isAvaliable it can be shown on next step.

According my concept it will be good idea to do something at methods.phtml where all payment method has been listing during the checkout.

<?php
$isCodeAvalibale=0;
    foreach ($this->getMethods() as $_method):
        $_code = $_method->getCode();
    if($_code =='cashondelivery'):
    $isCodeAvalibale=1;
    endif;
    endforeach;
if($isCodeAvalibale==0):
echo Mage::helper('payment')->__('Code is not avaliable.'));
endif;
?>

Change below code :

// Collect Rates and Set Shipping & Payment Method
$shippingAddress->setCollectShippingRates(true)
    ->collectShippingRates()
    ->setShippingMethod('flatrate_flatrate')
    ->setPaymentMethod('checkmo');

// Set Sales Order Payment
//$quote->getPayment()->importData(array('method' => 'checkmo'));
$quote->setShippingMethod('flatrate_flatrate');

to:

// Collect Rates and Set Shipping & Payment Method
$shippingAddress->setCollectShippingRates(true)
    ->collectShippingRates()
    ->setShippingMethod('flatrate_flatrate') 
    ->setPaymentMethod('checkmo');

// Set Sales Order Payment
$quote->getPayment()->importData(array('method' => 'checkmo'));
//$quote->setShippingMethod('flatrate_flatrate');

In above code you using shipping method flat rate, Make sure flat rate is enable.

setShippingMethod('flatrate_flatrate') 

same for payment method using below code you use check money order, make sure it is enable

->setPaymentMethod('checkmo');