[ymget]

I agree with Mark that this was probably the expected answer, but Clive's version is also grammatically correct. This would be said if the secretary then immediately hung up - maybe because it was a personal call.....

When I walked into the office the secretary talked on the phone.
When I was walking into the office the secretary talked on the phone.

Both of these could be used if she rang someone to tell them I had arrived.

But just because they are not the expected response, given that they are grammatically correct, why should the student be penalised? Maybe the student can't explain the reasoning for these, but then, maybe other students can't fully explain why they gave the right answer...... except maybe, the teacher told me :-)