I think the 'easiest' way would be to have a big futon that functions as bed and sofa - this would probably work best if you have people over often.
If you want/need a bed, I'd use barstools at the island for eating instead of a separate table. Then you could position a sofa/loveseat facing the fireplace with the head of the bed butted up against the back of it. Does that make sense?
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To be yourself in a world that is constantly trying to make you something else is the greatest accomplishment ~ {Ralph Waldo Emerson}
I'd try to fit in a twin size bed. I'd put a sofa in front of the fire place, and behind the sofa put up a screen or curtains and the bed of course right behind the sofa since there is no where else to put it!
Or I'd just make it out like a hotel room with a queen size bed and at least a comfy chair.
eek. thank you for your help elle and cortney but you confirmed what i thought.. it's really too small a layout for me! i guess i was hoping there was some perfect way to make it work!:)