What is the proper accounting for the redemption of stock in a closely held C corporation? The redemption was done as a buyout of a shareholder.

At the redemption of stock, (this means buy back the share from your shareholders and cancel them or keep them as treasure bill ) you have to re-calculate the average price per share to compare with the market price to see whether you have a gain or loss. The difference will be credited (gain) or debited (loss) to contribution surplus or retained earnings.