This visual trace shows how Kotlin converts a lambda expression into an instance of a Java interface with a single abstract method (SAM). First, a lambda is defined for the Runnable interface. Then Kotlin automatically wraps this lambda into a SAM instance and assigns it to the variable 'runnable'. When runnable.run() is called, the lambda code executes and prints 'Running'. This automatic conversion only works if the Java interface has exactly one abstract method. The variable tracker shows 'runnable' holds the SAM instance after assignment. The key moments clarify why the lambda can be assigned to the interface and what happens when the method is called. The quiz questions test understanding of these steps and the SAM conversion rule.