Go to File>new>blank file, w=8", h=10". If you want to print this and have a good print, the resolution should be 240-300 px/in range. Suggest that you check the dimensions of your paper stock to be sure that this is the correct size
Open both picture files and drag them from the project bin to the work area, one at a time
Each picture will be on its own layer. You should have 3 layers: Background on the bottom, picture 1 in the middle, picture 2 at the top
Access the move tool to position each picture and to resize using the corner handles of the bounding box