Why kotlin gradle plugin cannot build with 1.8 target?

I have the simplest gradle project configured using intellij for kotlin 1.2.10. Here is my build.gradle file:

buildscript {
    ext.kotlin_version = '1.2.10'

    repositories {
        mavenCentral()
    }
    dependencies {
        classpath "org.jetbrains.kotlin:kotlin-gradle-plugin:$kotlin_version"
    }
}

group 'com.ali'
version '1.0-SNAPSHOT'

apply plugin: 'java'
apply plugin: 'kotlin'

sourceCompatibility = 1.8

repositories {
    mavenCentral()
}

dependencies {
    compile "org.jetbrains.kotlin:kotlin-stdlib-jdk8:$kotlin_version"
    testCompile group: 'junit', name: 'junit', version: '4.12'
}

compileKotlin {
    kotlinOptions.jvmTarget = "1.8"
}
compileTestKotlin {
    kotlinOptions.jvmTarget = "1.8"
}

And I have a simple java interface:

public interface MyMath {
    static int myAbs(int input) {
        return Math.abs(input);
    }
}

When I import this interface and try to call myAbs method it fails with this error:

Error:(6, 12) Kotlin: Calls to static methods in Java interfaces are prohibited in JVM target 1.6. Recompile with '-jvm-target 1.8'

I have created an intellij kotlin app and it was working correctly. Is it a bug in new Kotlin gradle plugin?

It turned out that it was my kotlin compiler configuration in intellij settings. In Settings > Build, Execution, Deployment > Compiler > Kotlin Compiler a setting called Target JVM version should have been set to 1.8.