It is the presence of the real objects that causes in us real sensations. The world consists of substances, in which qualities and actions inhere. We perceive bodies and have a clear and immediate idea of our soul. We know bodies through sensation and the soul by reflection. Thought is an activity which inheres in the soul.
Bodies are material and souls immaterial.
From the perception of physical qualities their basic substance is assumed, for qualities cannot simply hang in the air, they must have a substratum. Similarly from the observation of mental operations, a notion of their basis, a spiritual soul, is formed. Locke admits that there is interaction between body and mind, both of which are real beings. All our ideas are the results of the action of bodies on our minds. The soul experiences changes on account of its being acted on by bodies outside.