Image not showing when trying to change folder image?

Hello, whenever I try to apply an image to a folder in Finder, it would just change to the default image to when it can't display. I recently learned that you can turn your folders into images, so I have no idea what I'm doing wrong.

The way I do it is by either copying the image, clicking "Get Info" on the folder, and then clicking "Cmd+v" or paste, or clicking "Get Info" and dragging the image from finder to the small folder icon in the Get Info window (it then shows a green plus to drop it there).

Both ways have the same end result. I tried using both .jpeg and .png files, with varying sizes from 30KB-1024KB but it would not work.

If anyone knows why and how to fix it, thank you very much, because this seems like a very cool feature that I'd like to use.

Thank you,

Kroppin