Eventually you will need to cut a board to fit the space into a corner. Measure the space and cut a board to slightly smaller than this (Image 1).
Position the cut board, placing its groove over the previous board's tongue. With the board a little short, you will have space to maneuver it (Image 2).
Finish the inside corner by butting the other piece of the cut board against the paneling. Then continue across the wall (Image 3).
Deal with an outside corner by cutting a board to fit. Use the other cut piece on the other side of the corner, for a balanced appearance (Image 4).
The corner will seem unsightly because the cut edge is visible. Sand it by using a block plane to finish the edge (Image 5).
When all paneling is in place, add a rail along the top to cover the gap caused by the furring strips between boards and wall (Image 6). Miter the corners.