Ok - so this sounds like a college kid/recent grad? A sofa or a sofa/chaise modified L shape would be great - you can find affordable ones at ikea or anywhere now in a ton of colors. That will add a little more space than a sofa and chair would. Wall mount the TV with a small console/shelf unit underneath that can hold playstation, cablebox, modem, books, etc. (If this is not allowed because its a rental then put the tv on top. Again, Ikea is awesome, it doesn't have to be a "tv" shelf for that. Do you think a dining table will actually get used? If not, save the space. I know my kid's apartment/suite in college next year has a sofa and coffeetable and they will eat there when home - or at his desk - if this is more of an adult place, there could be some room against a wall to do a small bar area that 2 people could sit at. Honestly in this size of a space - i'd find an ikea and take a drive (even a few hours) they have awesome in person examples of entire homes smaller than this and how they set them up functionally - and the prices can't be beat. We have a few items I bought after college that have hung around (and stayed in great condition) and my son will likely take to college with him if i can part with them

Once the futon is gone and then I would remove the shelf and plant from the corners and your room will seem larger. I would suggest 4 chairs around a low table. That makes for a great conversation area and for company while prep is going on in the kitchen. Maybe the table I’m seeing there now could be pushed to the island with the 3 chairs around it? Or if 4 chairs won’t fit maybe 2 larger chairs with ottomans in the corners next to the window.

What Beverly shows you works well and looks terrific to start. The only thing I would change is the TV - change it to what katinparadise and rthawk described. The console your TV is on now is contributing to the visual clutter - and their solution will eliminate that and clear up that corner area. Your room looks so much better with the sectional moved to the long wall. That sofa table Bevs shows really works with that end of the sofa - so you can add a lamp and make the room even more cozy. I love the curtains Bev shows and the way to hang them so they don't crowd the window (high) and full. Good luck, have fun with your new room! You are on the right track OP.

It's a great space! Have you thought about finishing the ceiling? That would certainly make it feel cozier, though I know there are lots of logistical and economic reasons that might prevent this. I'd divide the space in two and make one end into a family room/home theatre space with a big tv and comfy sofas (maybe one could be a pullout as an extra guest accommodation spot?), and keep the other end as the kids' free play area and your gym area. I'd probably get some shelving/cabinets for toy storage so the kids can use this as their space to really make a mess with toys and then have somewhere to tidy them into. In my home I need to use the basement for misc other storage (eg camping gear, tools, out of season clothes, rarely used specialty kitchen items), so if this was me I'd set up a storage area as well. As your kids grow up, a basement is a great play area and teenager zone. A perfect place for your kids to have their friends over to watch movies, hang out, eat chips, practice for a group presentation, host a rock band rehearsal, plan a sleepover... all while staying out of your main space and minimizing mess in the "nicer" areas upstairs. We have an unfinished basement and plan to dig it down and fully refinish it by the time our kids hit their teens for exactly this reason (we've got time though, I'm currently pregnant with #1). My husband and i both lived out most of our teen social lives in our own and our friends' basements, and have fond memories.