Okay back to the process...
Your background image in layers should now show the image with the white border which is the same as you working image. Drag the background image down to the icon directly to the left of the trash can which will add a second layer named "Background copy".
I normally work top and bottom then left and right.
Going to the tools pallet click on the Rectangular Marquee Tool. Using this tool go to the top of your image and dropping down ever so slightly, begin to open the box from left to right the full length of the image and approximately 2" down. Next go to Edit, Free Transform and click in the lower middle of the box dragging it upwards. You should see the image being moved in a mirror effect toward the top. Click on the check mark to okay the move. Click Control D (I'm on a PC) to deselect the tool. Do the same for the bottom opening the Rectangular Marquee Tool along the bottom then using the top of the box in Free Transform move the selection down into the white border and click okay. If you end up with a thin white line between the image and what you just mirrored redo your Rectangular Marquee Tool to just slightly inside the image and try again.
By now your background copy image should show the top and bottom being mirrored and you're left with the left and right white borders. What you need to do is one of either next step. The choice is yours. You can either flatten the image or going to Image and Duplicate, duplicate the image. I've done both. Either way you need to flatten the image to work on the sides.
Once you're ready to work on the sides you should again have a flatten image and just the background image showing. Duplicate the background making a copy of it.
The process of adding to the image is the same as what you've done to the top and bottom. By the time you're finished you should now have added a mirror 2" border all the way around your image and your image size should be 34.15x24.1. You should see some mirroring effect to the image however that shouldn't be a problem as you're looking at the side where the image is wrapped. If the mirror effect is bothersome then you might need to do a little cleanup using cloning or other effects.