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The site Logo is added to the menu bar using the menu bar option in
Appearance > Customize in WHERE mode > Menus > Primary Menu bar > Primary Menu Layout > Add Site logo to the left.
If it is only going to be in the menu bar, you also need to make sure it is hidden in the header area under
Appearance > Customize in WHERE mode > HEader > Header Image layout > Site Logo > Hide Site Logo
And the image only needs to be at least as high as the height of the menu bar. But regardless of its size, when placed in the menu bar, it will be scaled down to fit.