[step:Show that embeddings preserve and reflect quantifier-free formulas]
[claim:Quantifier-free formulas are invariant under embeddings]
For every quantifier-free $L$-formula $\theta(x_1,\dots,x_n)$ and every tuple $\bar{b} := (b_1,\dots,b_n) \in M^n$,
\begin{align*}
M \models \theta(\bar{b})
\iff
N \models \theta(f(\bar{b})).
\end{align*}
[/claim]
[proof]
First we prove the corresponding statement for terms. If $t(x_1,\dots,x_n)$ is an $L$-term, then
\begin{align*}
f\bigl(t^M(\bar{b})\bigr) = t^N(f(\bar{b})).
\end{align*}
This follows by induction on the construction of $t$: variables are immediate, constants are preserved because $f$ is an $L$-embedding, and function symbols are preserved by the definition of an $L$-embedding.
Now consider an atomic formula. If it has the form $t_1(\bar{x}) = t_2(\bar{x})$, then the term preservation just proved and injectivity of $f$ give
\begin{align*}
M \models t_1(\bar{b}) = t_2(\bar{b})
&\iff t_1^M(\bar{b}) = t_2^M(\bar{b}) \\
&\iff f(t_1^M(\bar{b})) = f(t_2^M(\bar{b})) \\
&\iff t_1^N(f(\bar{b})) = t_2^N(f(\bar{b})) \\
&\iff N \models t_1(f(\bar{b})) = t_2(f(\bar{b})).
\end{align*}
If the atomic formula has the form $R(t_1(\bar{x}),\dots,t_m(\bar{x}))$, where $R$ is an $m$-ary relation symbol of $L$, then term preservation and the fact that $f$ preserves and reflects $R$ give
\begin{align*}
M \models R(t_1(\bar{b}),\dots,t_m(\bar{b}))
\iff
N \models R(t_1(f(\bar{b})),\dots,t_m(f(\bar{b}))).
\end{align*}
Finally, every quantifier-free formula is built from atomic formulas using Boolean connectives. The equivalence is therefore preserved under $\neg$, $\wedge$, $\vee$, and the other Boolean connectives by induction on the construction of $\theta$. Hence
\begin{align*}
M \models \theta(\bar{b})
\iff
N \models \theta(f(\bar{b}))
\end{align*}
for every quantifier-free $L$-formula $\theta$.
[/proof]
[/step]