Hi All - Looking for any help on this odd S Corp sale.

I have 

an S Corp (Company) with only 1 owner

Original Owner (JB)

New owner (SR)

The Company purchased the 100 shares and "equity interest" from JB for $500k. This was recorded as a loan and treasury stock - is that correct? Can an S corp buy back treasury stock and essentially have no owner?

In the same purchase agreement - new owner (SR) pays the Company $100 for "equity interest" and all 100 shares.

1. Does this make sense?

2. Is SR's basis just the $100 he paid for equity interest?

3. What about the $500k the "Company" bought out the prior owner? Is that included as debt basis for SR?

4. This would be considered a stock sale correct?

5. How does that $500k come into play when SR wants to sell the business to someone new?

Thanks for any insight or help.