Formal lounge furniture arrangement - what to do?

Which of these two sofa arrangements, if any, would you suggest for our formal lounge? I am also thinking of some armchairs or just chairs, and maybe a rug as well...

To answer your questions ... We will be purchasing new sofas, coffee table etc for this room and there will be no TV in this room :)

I would love to hear your suggestions and feedback, as always :)

Also, would you recommend floor lamps or side tables with lamps on them? If so where would you place them?

Or

Our formal lounge room is a part of a large open living space and right next to the dining room.

And here is a slightly outdated photo of the space before we moved in and while the kitchen was still in progress.

And the floor plan:

B