Healthcare Providers Ltd. issued $7,500,000 of 8.5 percent, 15-year convertible bonds payable on July 1, 2020, at a price of 97.0. Each $1,000 face amount of bonds is convertible into 80 common shares. On December 31, 2021, bondholders exercised their right to convert the bonds into common shares.

Required

1. What would cause the bondholders to convert their bonds into common shares?

2. Without making journal entries, compute the carrying amount of the bonds payable at December 31, 2021. Healthcare Providers Ltd. uses the straight-line method to amortize a bond premium or discount on an annual basis. 

3. All amortization has been recorded properly. Journalize the conversion transaction at December 31, 2021.

4. How many common shares were received by the bondholders?