Getting Error: Execution failed for task app:transformClassesWithMultidexlistForDebug

I suggest you try to update to Java 8. Your stacktrace indicates that you are using Java 7 to build.

On https://developer.android.com/preview/setup-sdk.html it says that Java 8 is required:

but you still need to update to JDK 8 to compile against the Android N platform, as described below.

and

To compile your app against the Android N platform and use some tools with Android Studio 2.1, you need to install the Java 8 Developer Kit (JDK 8). So, if you don't already have the latest version, download JDK 8 now.