Office 365 domain shows Possible service issues - Resolution with screenshots

Q: We are working on migration from Exchange 2007 to Office 365. At first, we added the domain and verify is fine,.

Now, in the office 365, click Domain, it shows Possible service issues.

A: As you mentioned your account was verified which is what the TXT entry does. However, Your MX and other records are what's causing the error.
You also need to create MX and SPF records. Please refer to this page for the example:

DNS records required for Exchange Online  with example

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