Hargrove borrowed $40,000 as additional working capital for her business from the Old Town Bank. Old Town required that the loan be collateralized to the extent of 60%, and an acceptable surety for the entire amount be obtained. Prudent Surety Company agreed to act as surety on the loan and Hargrove pledged $24,000 of bearer negotiable bonds, which belonged to her husband, with Old Town. Hargrove has defaulted. Which of the following is correct?

A. As a result of the default, Prudent and Hargrove's husband are cosureties.
B. Old Town must first proceed against Hargrove and obtain a judgment for payment before it can proceed against the collateral.
C. Old Town must first liquidate the collateral before it can proceed against Prudent.
D. Prudent is liable in full immediately upon default by Hargrove, but will upon satisfaction of the debt be entitled to the collateral.

D. Prudent is liable in full immediately upon default by Hargrove, but will upon satisfaction of the debt be entitled to the collateral.