Suppose MSFT issued bonds and bought back shares...

I have included the latest balance statement for MSFT below. The market capitalization of MSFT is now $296B. Their debt/equity (Dt/Eq) ratio is 0.00.
Suppose that MSFT issued $295B in bonds. Also, suppose that they started buying back all their shares - except $1B.
How would this alter their financial statements? Would this make the financial statements weaker or stronger?
I realize that the company would be much bigger, based on assets, since they have a huge liability. The equity would get reduced from $35B to $1B or so.
In Millions of USD (except for per share items)     As of 2007-03-31 Cash & Equivalents      7,611.00 Short Term Investments      20,625.00 Cash and Short Term Investments      28,236.00 Accounts Receivable - Trade, Net      8,454.00 Receivables - Other      - Total Receivables, Net      8,454.00 Total Inventory      1,750.00 Prepaid Expenses      - Other Current Assets, Total      4,343.00 Total Current Assets      42,783.00
Property/Plant/Equipment, Total - Gross      - Goodwill, Net      4,217.00 Intangibles, Net      699.00 Long Term Investments      9,624.00 Other Long Term Assets, Total      2,645.00 Total Assets      63,891.00
Accounts Payable      2,843.00 Accrued Expenses      1,878.00 Notes Payable/Short Term Debt      0.00 Current Port. of LT Debt/Capital Leases      - Other Current liabilities, Total      16,906.00 Total Current Liabilities      21,627.00
Long Term Debt      - Capital Lease Obligations      - Total Long Term Debt      0.00
Total Debt      0.00
Deferred Income Tax      - Minority Interest      - Other Liabilities, Total      7,291.00 Total Liabilities      28,918.00
Redeemable Preferred Stock, Total      - Preferred Stock - Non Redeemable, Net      - Common Stock, Total      60,827.00 Additional Paid-In Capital      - Retained Earnings (Accumulated Deficit)      -25,854.00 Treasury Stock - Common      - Other Equity, Total      - Total Equity      34,973.00
Total Liabilities & Shareholders' Equity      63,891.00
Shares Outs - Common Stock Primary Issue      - Total Common Shares Outstanding      9,572.00
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