English and ESL Instructor
To begin with, you need to know that lie and lay are two separate base forms.
The word lie has two meanings:
1) To say something untruthful
2) To rest in a horizontal position on a surface (e.g. lie on a bed)
For the first definition, the past tense form would be lied:
Jeremy lied to the police about his involvement in the killing.
For the second definition, the past tense form would be lay:
Jeremy lay on the ground motionless after the baseball struck his head.
Note that lie is an intransitive verb, meaning that it cannot follow with a direct object pronoun. Therefore, it is improper to say the following:
Leo lied the books on the table. (The direct object in this example would be the books.)
Lay means to place an object in a horizontal position on a surface. The correct past tense form is laid:
Leo laid the books on the table.
Unlike lie, lay is a transitive verb, so it can follow with a direct object. That being said, the example above is perfectly grammatical.