Cut a piece of cove with a 45-degree miter at the end that will go in the corner. Position the miter so the long point is on the back of the molding. Using a coping saw, cut the front edge of the miter along the molding profile revealed by the miter, angling the saw about 5 degrees to make a slight back cut. If the blade binds, back out the saw and cut in from the edge to make a relief cut, then start again. When the whole profile is cut, check the coped piece against the molding on the back wall to be sure it butts tightly. Then cut the piece to length and nail it in place. Repeat this process on the other wall.
If necessary, install cove molding along the bottom of the wall in the same manner.