Thank you for your question.
I believe your first suggested transcription is the correct one, with spaces before and after the cancellation indicators, because spaces are required around an abbreviation (they just have to be polite and stand outside the cancellation indicator and its terminator. This makes reading the equation more intuitive.).
Please see the update to the Nemeth Code that deals with this: [url=http://www.brailleauthority.org/nemethupdates2015/rule-viii-54/Nemeth%20Update%20Rule%20VIII%2054.pdf]link[/url].