How do I restore my iPod Touch?

I recently found a iPod Touch that someone must of left or forgot to pick back up, the battery was nearly gone so i took it home and borrowed my friends iPod Touch USB wire to charge it, i then tried to turn it on but it said i needed a passcode. After researching on the internet i found out that the only way i could ever access this iPod is if i completly restore it back to its factory settings, so i then searched out how to restore this iPod touch, i found the intructions on how to do that on the iPod apple website, i did step 1, step 2 and step 3. In step 4 it said that once ide connected my iPod to iTunes my iPod would show up on the Source Panel in iTunes. IT DIDNT!. Instead, as soon as iTunes popped up after i connected the iPod to iTunes, iTunes popped up with a message saying “iTunes could not connect to the iPod “JAYA” because it is locked with a passcode, you must enter your passcode on the iPod before it can be used with iTunes” it gave me the option to either try again or cancel, so i clicked cancel. I waited a few minuits to see if the iPod would appear in the source panel and it didnt, nothing appeared! I am confused, what shall i do now? i need to restore the iPod but i cant connect the iPod to iTunes to restore it because it says i need a passcode, but i don’t know the passcode!! HELP!!!!??