Two Page Spreads on 8.5x11 (i.e. 11x17 spreads)

I wrote and illustrated a children's book that is composed mostly of large graphics on 2 page spreads. I'm going with a 8.5x11 format with most of the page spreads being 2 pages, i.e. 11x17.  I'm very, very confused by the Word templates provided by Lulu.  I've done several searches on this forum and I am not coming up with quite the right answer.  It sounds like I need to cut up the graphics and seperate them per page... I think I understand that.  What I don't get is what size the pages should be regarding that inner seam where the binding is.  Can anyone help me?  How do I work that inner seam?  


I'm a Photoshop master. I love the PNG templates for the cover and backcover.  It is odd to me that they don't provide the same sort of template for the interior pages of the book (left and right pages) when so many of us are children's writers.


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