trouble creating aac files

I'm trying to convert my son's songs from mpegs to aac files so he can listen to them on his nintendo ds, but I'm having a problem. I'm clicking on the song, right-clicking the mouse, clicking on create aac version; I can see that it is converting the song, but I can't find the newly created version. It isn't showing up in the playlist I'm viewing and no other new playlist is being created. Where can I find the converted file?
Thanks!!

 

I did check, but didn't see it. I just double-checked and see that the files are there. Must have overlooked them. Thanks!