It is impossible to create evil, since evil is not a something, but a nothing — it is a lack of goodness like darkness is a lack of light. And since all being is made good, evil is simply a privation of being.
That's an important distinction because the devil couldn't create anything out of nothing. His choice resulted in becoming less than what he was meant to be. Less goodness, truth, life, joy, etc. That's what sin does to angels, and to humans.
God is infinite perfect Goodness. We creatures are good in a finite way; that is, good according to our limited nature. The same is true with angels. Therefore, since our being is not infinite and eternal like God, one could say there is ontological space for us to choose evil (non-good) — it is possible.
You're correct in saying that demons did not know evil when they were created. But the temptation to be one's own ultimate authority is a challenge for all free creatures.
On account of this, a certain number of angels (and humans) said, No to God, and as a result profoundly diminished themselves of life, joy, hope, and love.