Q

Replace ’were’ with was’.

When two subjects are joined by ’not only...but also’, the verb must agree with the second subject.

The correct sentence should be: “Not only the students but also the principal was laughing at the joke he cracked.

The same rule applies when two subjects are joined by ’or’, the verb must agree with the second subject.

For e.g. Krish and his brothers were there. (Second subject is ’plural’) Mohan or Sohan is responsible for this. (Second subject is ’singular’)