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A is corrent. When the creditor refuses to accept the principal debtor’s tender of payment, the surety is released. However, the debtor remains liable as the accrual of additional interest stops.
B is incorrect because if the creditor modifies the debtor’s contract in a beneficial way that does not increase the surety’s risk, the surety is not released.
C is incorrect because a compensated surety is not released by nonmaterial modifications, although the surety’s total obligation can be reduced in such cases.
D is incorrect because although material modifications normally release the surety, this is not true if the surety agrees to them.