Object turns black when selecting the new image to which texture will get baked to in Blender Internal There are many questions relevant to baking in blender internal mode. But i could not find any solution to my problem.
After creating the object I unwrapped it and saved the unwrapped image with a name. Next, I assigned a image texture in the texture properties panel.
Next, I selected the image texture from the drop-down menu in the UV/Image editor and the texture is getting applied.
Then, to bake the texture, I created a new image, and just when I am selecting the new image, the object is turning black. I can't proceed to bake any further. Still it's showing that no images found to bake to.
If you Shift+ Z You will switch to "rendered shading mode" instead of "material shading mode" and will see the texture.

After you bake it, it should be viewable in material shading mode.

Your texture wasnt attached to the file, so I found a random one online