Sentence 1: Carol and her family were on vacation. 
 Sentence 3: They had rented a house right near the water 
 Sentence 4:  Everyday they would walk down to the beach and relax 
 Sentence 5:  Carol thought it was a beautiful time 
 Option 1: They had gone to the mountains and it was very nice. 
 Option 2: They had gone to the beach and it was very nice.