Correct Answer: A movie on TV was being watched by them when their friends came.

Solution : The second option is the correct answer.

Passive voice is the voice in which the object experiences an action rather than the person who performs the action. Hence, the object in the active sentence becomes the subject in the passive voice.

The structure of the passive voice in the case of the past continuous tense is: " Singular object + was being + past participle form of the main verb + 'by' followed by the agent of the action."

Therefore, the correct answer is: "A movie on TV was being watched by them when their friends came."