Translation:Éva is preparing the paprikás, I am eating it.
Aha! I think I just had a moment of insight. I translated the second half as "I am eating," but because the sentence uses the definite conjugation, it has to be translated as "I am eating it [the paprikas]," right?
Eva kesziti a paprikast, en MEGESZEM. (I eat it) instead of "en eszem" (I eat)
"Éva is making the paprikás" should be accepted. In hungarian different words are used for the "prepare" word translation, therefore make is also a correct translation from hungarian, to english.