iMac As a second PC Monitor

I'm not sure you can use that adapter:

http://support.apple.com/kb/HT3924#4

 

Yes here is not idea but facts, because your iMac uses Thunderbolt for Target Display Mode, your PC does not have Thunderbolt video output therefore it will not work, don't waste your time asking for work arounds, there are none. Someone asks this question about 3 times a week, I think you're #5 this week.

 

To avoid confusion when your looking up accessories, your model is referred to as the late 2012 iMac, even though only about 5 shipped in 2012 .

 

Thunderbolt isn't the video output, the mini displayport is. They are combined into one port.

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Try pressing command + f2 on your imac once everything is plugged in.

 

Nitpicking.

Edit: Don't even think you are right here, thunderbolt by itself is just a transporter of signals based on PCI, you can transport all signals/protocols with it as long as there are drivers for it.
(If it is used as a cable for Video output it's a video cable)

 

This would probably work if your iMac was a 27" 2010 model, which had no Thunderbolt, and accepted a DisplayPort video signal input.

 

You're holding it wrong!

Sorry, nobody else said it, so I had to.