Each establishment is different, but here's the general jist of what you should do:
You go and pay the $42 bill with the $50 bill (which, by the way, most Americans never use), and you get your $8 change. If you want to leave $5, just lay the fiver on the table and leave.
Now, it also depends if you pay the waiter, or if you have to pay at a counter. Giving the waiter cash and saying "there's a $xx tip in there" and still wanting change back, to me, seems kinda weird. I wouldn't do it. I would either want all my money back and leave the tip on the table, or say "keep the change" and leave.
You can't go wrong with getting change and leaving the tip.
By the way, $5 on a $42 bill is pretty cheap there, buddy. I would have given the waiter at least the full $8. Remember, it's 15-20%, at the minimum.
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