When you do a receipt of goods or inventory adjustment or Work Order or Bill of Materials production and the item has a valuation of LOT it will ask you for the Lot number. Enter it then.  That's how you create a Lot

And to piggy back on BigLouie's comments.  The item in item maintenance must have it's valuation method set to LOT.  If you already have quantity on hand, you will want to adjust out the quantity on hand, change the item to Lot Tacking and then adjust in one single lot number for the quantity or the individual lot numbers with appropriate quantities.  Once the item is set at Lot Valuation Method, you need to assign the lot at PO Receipt of Goods, BOM Production Entry or Work Ticket Make to Stock Completions. 

Please note that LOTS are created when inventory is brought into the system through a transaction.  You do not create them before hand as you seem to imply. 

Thanks very much for replying.. We figured it out