The correct simple past form of the verb "to be" (was/were) in the dialogue is as follows:
- How was your vacation?
- MIKE: Oh, it was terrible!
- CHARLIE: What? Why? What happened?
- MIKE: Oh, the trip was okay; the ship was great.
- CHARLIE: All right, was the sea okay; the ship had a tennis court and there were two swimming pools.
In the dialogue, "was" is used for singular subjects like "trip," "sea," and "ship." "Were" is used when referring to plural subjects like "swimming pools." This follows the standard rule for using the simple past tense of the verb "to be."