mountain lion guest

I need to install a version of Mac OS X Mountain Lion to run some legacy software. I have downloaded the DMG file for this older operating system, but I cannot find a way to create a new virtual machine with it in Parallels 18 on my MacBook Pro. There must be a way to do this. Please advise.

I was using Parallels 16 on my iMac to create a VM for MacOS 10.8 Mountain Lion. It asked for my Apple ID and password, which I entered, but I lost the 6-digit verification code (another story), so am stuck on the page requesting the code. How can I restart the installation process for MacOS...