On January 2, year 1, Randy sold a parcel of land that he held as an investment for a number of years. The land has a basis to Randy of $8,500. The buyer made a $6,000 down payment on the date of sale and made $7,000 payments on January 2 in both year 2 and year 3. In addition, an 8 percent rate of interest was charged on the unpaid balance. How much income should Randy have recognized in years 1, 2, and 3, assuming that he used the installment method? What is the result if Randy elects out of the installment method for this sale?