Android Studio – Arctic fox 3.1 RC1 – Execution failed for task ':app:compileDebugKotlin'

I just run RC1 version of artic fox, unfortunately I’m always getting the same error when I try to run empty compose activity project and that’s the error.

I have no idea where 1.0.0-rc01 come from, when everything is changed to rc02

> Task :app:compileDebugKotlin FAILED
w: ATTENTION!
This build uses unsafe internal compiler arguments:

-XXLanguage:+NonParenthesizedAnnotationsOnFunctionalTypes

This mode is not recommended for production use,
as no stability/compatibility guarantees are given on
compiler or generated code. Use it at your own risk!

e: This version (1.0.0-rc01) of the Compose Compiler requires Kotlin version 1.5.10 but you appear to be using Kotlin version 1.5.21 which is not known to be compatible.  Please fix your configuration (or `suppressKotlinVersionCompatibilityCheck` but don't say I didn't warn you!).

Execution failed for task :app:compileDebugKotlin

It’s a fresh copy of RC1 Arctic Fox, just did a few updates. What am I missing here?

Here is my build.gradle

buildscript {
    ext {
        compose_version = '1.0.0-rc02'
    }
    repositories {
        google()
        mavenCentral()
    }
    dependencies {
        classpath "com.android.tools.build:gradle:7.0.0-rc01"
        classpath "org.jetbrains.kotlin:kotlin-gradle-plugin:1.5.21"

        // NOTE: Do not place your application dependencies here; they belong
        // in the individual module build.gradle files
    }
}

task clean(type: Delete) {
    delete rootProject.buildDir
}

:app

plugins {
    id 'com.android.application'
    id 'kotlin-android'
}

android {
    compileSdk 31
    buildToolsVersion "31.0.0"

    defaultConfig {
        applicationId "com.example.testoandroid1"
        minSdk 21
        targetSdk 31
        versionCode 1
        versionName "1.0"

        testInstrumentationRunner "androidx.test.runner.AndroidJUnitRunner"
        vectorDrawables {
            useSupportLibrary true
        }
    }

    buildTypes {
        release {
            minifyEnabled false
            proguardFiles getDefaultProguardFile('proguard-android-optimize.txt'), 'proguard-rules.pro'
        }
    }
    compileOptions {
        sourceCompatibility JavaVersion.VERSION_1_8
        targetCompatibility JavaVersion.VERSION_1_8
    }
    kotlinOptions {
        jvmTarget = '1.8'
        useIR = true
    }
    buildFeatures {
        compose true
    }
    composeOptions {
        kotlinCompilerExtensionVersion compose_version

    }
}

dependencies {

    implementation 'androidx.core:core-ktx:1.6.0'
    implementation 'androidx.appcompat:appcompat:1.3.1'
    implementation 'com.google.android.material:material:1.4.0'
    implementation "androidx.compose.ui:ui:$compose_version"
    // Material design icons
    implementation 'androidx.compose.material:material-icons-core:1.0.0-rc02'
    implementation 'androidx.compose.material:material-icons-extended:1.0.0-rc02'
    implementation "androidx.compose.material:material:$compose_version"
    // Tooling support (Previews, etc.)
    implementation 'androidx.compose.ui:ui-tooling:1.0.0-rc02'
    implementation "androidx.compose.ui:ui-tooling-preview:$compose_version"
    // Foundation (Border, Background, Box, Image, Scroll, shapes, animations, etc.)
    implementation 'androidx.compose.foundation:foundation:1.0.0-rc02'
    // Integration with ViewModels
    implementation 'androidx.lifecycle:lifecycle-viewmodel-compose:1.0.0-alpha07'
    implementation 'androidx.lifecycle:lifecycle-runtime-ktx:2.3.1'
    implementation 'androidx.activity:activity-compose:1.3.0-rc02'
    testImplementation 'junit:junit:4.13.2'
    androidTestImplementation 'androidx.test.ext:junit:1.1.3'
    androidTestImplementation 'androidx.test.espresso:espresso-core:3.4.0'
    androidTestImplementation "androidx.compose.ui:ui-test-junit4:$compose_version"
    debugImplementation "androidx.compose.ui:ui-tooling:$compose_version"
    // Integration with observables
    implementation 'androidx.compose.runtime:runtime-livedata:1.0.0-rc02'
    implementation 'androidx.compose.runtime:runtime-rxjava2:1.0.0-rc02'
}