The process of nitrogen fixation is best described by the second option:
Soil bacteria convert nitrogen gas into ammonia, nitrites, and then nitrates. Nitrates are then absorbed by producers.
In this process, certain bacteria (such as those in the soil or in symbiotic relationships with plants) convert atmospheric nitrogen (N₂) into ammonia (NH₃), which can then be further converted into nitrites (NO₂⁻) and nitrates (NO₃⁻). These nitrates are essential nutrients that plants absorb through their roots to synthesize proteins and other important compounds.