Select Crop tool and drag out over image. You have the option to drag out farther. if you hold down the options key then it keeps the crop tool balanced. go over to the background layer and double click it and make it a normal layer. Do the same thing with the crop tool and make the canvas bigger and the canvas should be transparent. Hold down command and click the new layer and it shall be under the original layer. There should be many options and you fill in the layer with the color you want.
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