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When I try to perform free transform, it keeps prompting me "could not transform because the initial bounding box is empty" and thus cannot be transformed. How can I solve this issue?
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Try transforming actual pixel content instead of an empty Layer (or Selection).
Could you please post screenshots with the pertinent Panels (Toolbar, Layers, Options Bar, …) visible?
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Check your document for any selections, which may be preventing you from transforming, especially if a selection is on an empty layer.