At May 31, Year One, Quay owned a $10,000 whole-life insurance policy with a cash-surrender value of $4,500, net of loans of $2,500. In Quay's May 31, Year One personal statement of financial condition, what amount should be reported as investment in life insurance?

a) $4,500

b) $7,000

c) $7,500

d) $10,000