Electrical Repair Questions? Ask an Electrician for Answers ASAP
Your furnace has a junction box built into it and that is where the 120 volt wiring connects. On the outside of the furnace a single gang handy box is generally mounted. You must install a means of disconnect in this box. This would be what is called an SSU on an older furnace. This has a switch and a fuse in a box cover. The black wire from the furnace will connect to the back of the fuse holder, the white from the furnace will connect to the white wire in the circuit supplying the power to the furnace. The black wire in the feed circuit will connect to the switch. Check the furnace documentation to see how big of a fuse you need to properly protect the blower motor and install a Type S fuse with the proper adaptor.
For the thermostat you should be able to use a 2 wire thermostat. You will have 2 wire thermostat wire from the furnace to the thermostat in the living quarters of the house. There are 2 terminals in this thermostat that you will connect to. They may have letters next to them like R and W. Connect the wires to these terminals. Inside the furnace there is a terminal block for the control wiring. The old thermostat should have connected here as well. Connect the other end of these 2 wires to the control unit terminals to the R and W terminals. This should allow the thermost to turn your furnace burner off and on.
Let me put together a diagram for you. I'll be back with it shortly
This is a typical wiring diagram for a 2 wire thermostat. The transformer 115 volt lines are the the same as the white and black that you connect to at the junction box.