Waratah Ltd Acquired a 60% Ownership Interest in Bottle Brush

Waratah Ltd acquired a 60% ownership interest in Bottle Brush Ltd on 30 June 20X5. On the same day, Bottle Brush Ltd acquired a 70% ownership interest in Honeydew Ltd. The following inter-entity transactions have taken place between the entities in the group during the years ended 30 June 20X6 and 30 June 20X7.
On 1 July 20X5 Bottle Brush sold an item of plant to Honeydew for a profit of $20 000. The remaining useful life of the plant at the date of transfer was 4 years.
-On 1 September 20X5, Honeydew paid a dividend of $70 000 from profits earned since 30 June 20X5.
-Waratah lent $50 000 to Bottle Brush on 1 January 20X6. Interest charged on the loan for the year ended 30 June 20X6 was $2000 and for the year ended 30 June 20X7 was $4000.
On 31 May 20X6 Waratah sold inventories to Honeydew for $15 000. Profit earned on the sale was $5000. Honeydew sold the inventories to external parties on 1 August 20X6.
Details of profits earned by entities within the group for the years ended 30 June 20X6 and 30 June 20X7 are:
$$\begin{array} { | l | l | l | } \hline & 30 \text { June 20X6 } & 30 \text { June } 20X7 \\\hline \text { Waratah } & 100000 & 125000 \\\hline \text { Bottle Brush } & 85000 & 70000 \\\hline \text { Honeydew } & 20000 & 35000 \\\hline\end{array}$$ The tax rate is 30%.
The effect of the interest paid by Bottle Brush to Waratah on the NCI of Bottle Brush for the year ended 30 June 20X7 is:

A) nil.
B) an increase in MI of $1120.
C) an increase in MI of $1600.
D) an increase in MI of $2800.