Download and install music recording software. You're not going to be recording any projects yet; you just want the laptop to recognize the guitar signal. Consider buying some cheap software or even downloading freeware such as Audacity. If you plan on creating recording projects in the future, look into Pro Tools, MixCraft or GarageBand.
Plug the male end of your USB guitar adapter into one of the laptop's USB ports.
Plug one end of the 1/4" guitar cable into the guitar's input jack. Plug the other end of this same cable into the USB guitar adapter's 1/4" "line in" jack.
Power on the laptop and open the recording software program. Set the "input device" to the USB guitar adapter. Begin playing the guitar to see if it's working. Make sure the input and output volumes--in the software program--are both turned up.
Select "Effects" from the toolbar menu of the recording program to experiment with different guitar effects while playing.