If there is balance in contributed surplus, wash it out completely, any residual value from $4900 is recorded as a deduction to retained earnings.
For example, if contributed surplus has $3,000 balance.
Dr. Common share 100
Dr. Contributed Surplus 3000
Dr. Retained earnings 1900
Cr. Cash 5000
For example, if contributed surplus has $3,000 balance.
Dr. Common share 100
Dr. Contributed Surplus 3000
Dr. Retained earnings 1900
Cr. Cash 5000