Formation of image is shown in figure by ray diagram.
The parallel rays coming from the object, situated at infinity, form the inverted, small and real image A’ B’ at the second focus F0 after refraction through objective lens. This intermediate image A’B’ acts as virtual object for eye lens. Hence eye lens is displaced forward or backward till this image comes within first focal plane of eye lens. Thus virtual, larger and erect image A”B” with respect A’B’ is formed which is the final image.