Replace
<h1 id="site-title"><a href="<?php echo home_url( '/' ); ?>" title="<?php echo esc_attr( get_bloginfo( 'name', 'display' ) ); ?>" rel="home"><?php bloginfo( 'name' ); ?></a></h1>
With
<h1 id="site-title"><span><a href="<?php echo esc_url( home_url( '/' ) ); ?>" title="<?php echo esc_attr( get_bloginfo( 'name', 'display' ) ); ?>" rel="home"><img id="site-logo" src="<?php echo get_stylesheet_directory_uri(); ?>/images/site-logo.png" alt="" /></a></span></h1>
The above code assumes that the logo image site-logo.png is located in the /images folder of your theme. You can use any other absolute path to the location of your actual logo image instead:
src="http://anyabsolutepath/logo.jpg"
