New Hard drive won't boot

I just purchased a used Early 2011 MBP to upgrade my late '09 model. I replaced the hard drive with a WD 1TB, and tried to boot up and cannot get any recognition of the drive that I just installed.

I pulled the drive and formatted it, via my older computer. I put it back into the new machine and it still won't come up. I've tried using the holding down "C" nothing--I've tried holding down Option, and that gives me the install screen but NO DRIVE is next to the OSX install icon.

I know that the drive is okay IN the machine because with a jumper, I can get the new computer to boot up with the drive that I removed. When I had it up and running, I reformatted the disc, thinking that I would be able to see it, but nope, nothing.

ANY suggestions would be awesome.

Some information:

The old hard drive from the new computer is running LION

My current MBP is running Snow Leopard

I currently have full versions of Snow Leopard AND install discs for my old computer....so I do have legal operating systems, but it will not let me put lion onto the new Hard Drive, because I have not purchased it -- What I want is Mountain Lion but I don't want to have to purchase BOTH since I don't "need" both.

Anybody??? Bueller,,,? Bueller????