The idea is commonly known as a carrier current transmission system. Your TX signal can be injected into the mains by first injecting it into the primary of a signal transformer designed to pass 120 KHz, and to withstand the mains voltage. The secondary of the transformer is connected to the mains through a series coupling capacitor selected to provide high reactance to the 60 Hz mains frequency and relatively low reactance to the 120 KHz signal. The same technique can be used on the RX side to recover the signal. The transformer could be selected to provide some degree of impedance matching, if necessary, and signal voltage boosting on the RX side, since the mains impedance at 120 KHz is in the tens of ohms.
Realistic simulation is somewhat problematic since the mains is a complex system that varies greatly from one installation to another with all sorts of potentially interfering signals from the various loads that one finds connected to it.