Have you tried the transferring purchases in the File drop down menu? Also you can download your purchase by checking the second article to see your purchases within your library or by going to the iTunes Store and click the Purchases link.
Thank you for your help.
The transferring purchases I knew how to do, but this did not work. I tried going into itunes store and clicked on the purchases link. And here i clicked on the icloud/download icon and this added the purchased music to my library.
I do appreciate your help and am glad this has worked it is extremely frustrating that it is that complicated in the first place and would not transfer automatically. Bad itunes, you are becoming even more user unfriendly!!