You can create an in memory database to mock the application database context and add test data to the in memory db for testing.
Please refer the below code.

// Create in memory database

private readonly ApplicationDbContext _dbContext;

// In the constructor
public ClassConstructor()
{
     dbContext = CreateInMemoryDatabase("InMemory_DB");
     SetupMockData();
 }

private static ApplicationDbContext CreateInMemoryDatabase(string databaseName)
{
var options = new DbContextOptionsBuilder<ApplicationDbContext>()
               .UseInMemoryDatabase(databaseName: $"{databaseName}_{Guid.NewGuid()}")
               .ConfigureWarnings(x => x.Ignore(InMemoryEventId.TransactionIgnoredWarning))
               .Options;
            var context = new ApplicationDbContext(options);
            context.Database.EnsureDeleted();
            context.Database.EnsureCreated();
            return context;
}

// Add the mock data
private void SetupMockData()
{
    _dbContext.AddAsync(new Entity
    {
        Id = 1,
        Name = "Name"
     });

    _dbContext.SaveChanges();
}