A girl said she was told by of one of the teenagers accused of murdering Angela Wrightson that she was involved in the fatal attack.
A jury was told that the girl said the vulnerable woman “had it coming,” before “laughing” about the killing.
Two girls, aged 13 and 14 at the time of the crime, are accused of killing the 39-year-old at her Stephen Street home in Hartlepool in December 2014.
Ms Wrightson had suffered more than 100 separate injuries and was beaten with items including a broken vase, TV set, a printer and a shovel.
The pair, who cannot be named for legal reasons, are standing trial at Leeds Crown Court.
A 16-year-old girl giving evidence at the hearing said she became friends with the younger defendant when she was on remand over the killing and they were both in a secure unit last summer.
The witness, appearing via videolink, said: “(Younger defendant) said this girl started lying about her so they went around this girl’s house and just slapped her up and gave her a beating to shut her up, but it went a bit too far.
“I think (younger defendant’s) mate went a bit too far and started smashing things up.”
The girl told police when interviewed that the younger defendant told her she had joined in with “smashing” things and “kicking” the woman.
The witness said she then asked the girl: “You killed someone?” to which she replied: “No, but my mate did.”
“She just said that the girl had been lying about her”, adding that she was spreading loads of stories about her “so they went around and went mental at this girl”.
The witness added: “(Younger defendant) just laughed about it.
“It wasn’t even a happy laugh, it was a really demented, evil laugh.
“I said: ‘Do you feel guilty about it?’ and she said “No, she had it coming.”
The witness added that she did “not like” the younger defendant and they had fallen out following the conversation.
Under cross-examination from Jamie Hill QC, defending the older girl, the witness was asked: “When (younger defendant) gave you some detail about what had happened to this woman, did she say that she personally
had caused violence herself?”
The teenager replied: “Yeah. But only towards the end when she was encouraged by her (co-accused).
“I think that they were both smashing things over the girl’s heard but only her (co-accused) was kicking her in the head.”
The witness was then questioned by the defence for the younger defendant, John Elvidge QC.
The exchanges became heated when Mr Elvidge suggested that the girl had “got it wrong”.
“I was told that,” replied the girl.
“Why would I lie about it?”
The court also heard from a number of Ms Wrightson’s friends and neighbours, including Donna Jenkins, who had served a prison sentence alongside her.
She described the victim as a “lost soul” and “chronic alcoholic”, who was easily taken advantage of by others, including children from the area who she would buy cigarettes and alcohol for.
She also said that she knew Ms Wrightson as being capable of drinking nine litres of strong cider a day and that she would often be found lying in the road.
In a witness statement Ms Jenkins added: “People would take money and mobile phones from her, and use her home as a doss house.
“She’d cry and tell me that she had no family.
“I think Angela craved company.”
Siobhan Quinn, who also lived in Stephen Street, described seeing two women knocking on Ms Wrightson’s front door on Monday, December 8, 2014, the night she is alleged to have been murdered by the two girls.
Ms Quinn said she heard one of the women say while outside Ms Wrightson’s: “Open the door, it’s us. We’ve got drink.”
When no-one came to the door, Ms Quinn added that she heard one of the women say to the other “someone has wrecked her (Ms Wrightson’s) house,” before the pair left the street.
The next day, Ms Wrightson’s battered body was discovered by her landlord.
The two defendants, now aged 15 and 14, deny murder.
The trial continues.