How to show two posts in each item

A bit more info would be relevant – i.e. theme, where are you trying to do this, code you are using, link to your site.

This can be easily done by creating a counter, here is the updated code:

<h2>Recent News</h2>
<ul class="post-carousel">
  <?php
    $posts = get_posts("showposts=10");
    if ($posts) {
      $counter=0;
      foreach ( $posts as $post) : setup_postdata($post);
        echo ($counter % 2 ==0) ? '<li>':'';?>
        <div class="entry">
          <div class="entry-date">
            <div class="entry-day"><?php the_time('d'); ?></div>
            <div class="entry-month"><?php the_time('M'); ?></div>
          </div>

          <div class="entry-body">
            <h4 class="entry-title"><a href="<?php the_permalink() ?>"><?php the_title(); ?></a></h4>
            <div class="entry-content">
              <div class="content">
                <?php echo wp_trim_words(apply_filters('the_excerpt', $post->post_content), $num_words = 55); ?>
              </div>
              <p><a href="<?php the_permalink() ?>">Read More &rsaquo;</a></p>
            </div>
          </div>
        </div>
        <?php  echo ($counter % 2 == 1) ? '</li>': '';
        $counter++;
      endforeach;
    }
    echo ($counter % 2 == 1) ? '</li>': '';
  ?>
</ul>