Bake UV Grid to UV map

I have a model where its color shading only shows up when UV test under Image>Generated is enabled. What I want to know is how can I bake the colors from UV test to a UV Map for the mesh. When I bake the texture it always just shows up gray although the UV test shows colors when applied to the model.

Save the test grid as an image file from the UV/Image editor window. Then set that as the objet texture.