Step 1: Subject.
"The rest of the students" → "students" is plural, so plural verb is required.
Step 2: Checking options.
(A) is — wrong.
(B) are — correct plural verb.
(C) has — wrong tense/form.
(D) have — incorrect here.
Step 3: Conclusion.
Correct answer is (B) are.
Identify the part of the sentence that contains a grammatical error:
Each of the boys have submitted their assignment on time.