120 PSI is NOT bad compression in these engines, particularly after sitting unused a long time.
While mine is modified to have higher compression than (K2) stock, it hits 135 when hot, but less when cold (haven't tested it in a while, but that's what is was in 2020 during Covid shut-in). The K7/8 should have similar numbers. These numbers, though, vary a LOT between the types pf compression gages used: those with long hoses on them read much, much lower than the ones Honda used, which had a 2.5" long (angled) aluminum pipe on the gage to reach the plug holes. Those gave numbers like the ones seen in their manuals, but those with longer pipes/hoses do not.