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The Stars own a home in New York. They paid $1.2 million for the home several years ago. They originally took out a $1 million

The Stars own a home in New York. They paid $1.2 million for the home several years

ago. They originally took out a $1 million mortgage on the home. In the current year, the

Stars refinanced their home at a time when the home was worth $2 million and the

outstanding mortgage balance was $700,000. Their new mortgage is for $1.3 million.

After the refinancing, the Stars's acquisition debt is:

a. $1.2 million.

b. $700,000.

c. $1.3 million.

d. $1 million.

e. $800,000.

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