Please help i know that there is someway to do this in software.
in software means that you don't want to use the hardware timers?
Have a look at http://arduino.cc/en/Reference/DelayMicroseconds
replace the value 50 in the two lines delayMicroseconds(50); by a value that fits your needs, e.g.: delayMicroseconds(1);
and measure the frequency on the output pin... modify the value until you read 120kHz. On my Arduino I can't get better than 108kHz with this software solution.
Maybe you consider using a hardware timer (e.g. timer1) for your problem?