: Should you "Show, Don't Tell" when your character is recounting events? "Show, don't tell" is a popular ethos amongst writers, and one that is very important to writing engaging stories. However,

My approach would've been different, in that I would actually replay the parts of the event that "what's-her-name" was suspicious about, and have her speak, out loud (whether it's muttering to herself, or bursting out like a "ah-ha! I've got the other culprit!" scenario...).
I always prefer showing, it's much more visual.

---

(0)

I might offer some more to this question in light of the existing answers. Lana needs to notice the actions which leads to her suspicion of guilt. Showing these actions to both her and the reader will accomplish the goal.

It's the actions that speak loud to her in her realisation. Also, your sentence is a bit long and feels like it has too many stops and starts. The paragraph has a few separable points of interest so here's my take:

John was puffing out his chest, all hot under the collar and not doing anything in particular to exonerate himself, when Lana noticed Terrence move into John's shadow. His face flushed with emotion and he became somewhat nervous, only stealing glances at John and not looking directly at him. She realised he must have felt guilty for what he had done.

I have an example from one of my own short stories which may help:

Jake turned turn off the ignition, the car engine stopped and he braced for an onslaught from his father, whom he didn’t dare to look back at.

How much of this action can you extrapolate into understanding of the actual story being written? The actions in this one sentence tell a lot. Jake had probably been driving his dad's car, likely without permission, and felt stupendously guilty about it.

As a social and emotional species, a lot of what we do says much of what we don't want to say.

---

(0)

Telling is most appropriate when the events are not important to the story.

They can be transitional and probably use few(er) words.
For example:

After she fell into the pool, they went inside while she changed her
clothes.

@DanHanly said:

Her perception of the event in this case, is perhaps more important to
the story than the actual event itself.

A Solid Clue

That should be a clue to yourself that this is what should be shown. It is what you, the author, are saying is important to the story. That means you want the reader to experience it as if s/he were living the events. That means you want to act this part out in front of the reader.

However, the challenge you have here is that a lot of what Lana is going through is internalization and that is difficult to act out. However, it is possible.

Deep Imagination Required

To do so, first of all you must put yourself in the place of Lana. What if you were overwhelmed by something you were thinking? How might you move or act. Maybe something like the following:

Lana looked up from the sink of dishes she was washing. She stared at
a bubble floating free of the sink and her mouth turned up in a slight
smile. As suddenly as the bubble had floated up, it plummeted back to
the faucet where it landed and burst. At the same moment Lana burst
into silent tears.
She shook her head. "It's too much," she thought.
"How much pain must I bear?"

She threw the dish rag she held into the sink and the water splashed
out onto the top of her foot, soaking through her sock.

---

(0)

I don’t like to criticize and style is subjective, so I will delete this post if I get a few DVs… i am not yet sure of the SE etiquette.

I couldn’t understand your sentence at first, it took me several attempts to re-read it as well as the clarification of the answers to SEE what you were trying to describe. You may get some insights at
What's the difference between purple prose and vividly descriptive writing?

”Whilst John was puffing his chest out,”

Not getting the image, you need to make us imagine the chest expending, bursting out of the seams, saying
“puffing” is not enough

”getting all hot under the collar,”

You are telling us, you need to SHOW us the sweat driping, the damp collar, the redness of his cheeks..

“and not doing anything specific to exonerate himself, Lana witnessed Terrence,”

not visual and unclear, all mental

”stood in John's shadow, moving deeper and deeper”

SHOW us movement, SHOW us shadow and dept, make us yearn or fear the shadow, make it a living entity, give it character, bring life to it

” in to what she perceived as guilt, at least for his part, in the crime.”

Telling, not showing entirely mental

Above all use SHORT sentences mixed with some medium ones and only rarely long sentences to create rhythm, else you drown the reader in a sea of words

This whole excerpt doesn’t seem visual at all to me, it is very much telling and noting shows. If it is representative of your writings, you may want to train yourself to be more visual like by writing movie scripts for instance.

Sorry for the harsh critique, what works for one reader may not work for another.

QUESTION

To go back to the original question, I believe that showing is ALWAYS better than telling. Telling should be used only when there is not choice.

Here you do have ample choice, it is visual, even the guilt can be SHOWN, implied or indirectly situationaly made apparent rather than telling us.

---

(0)

Describe what she's seeing which makes her perceive Terrence's emotions.

Lana looked over at Terrence, who had deliberately put himself into John's shadow. Emotions flickered over Terrence's face like a cascade of sparks. He couldn't quite look at John, but kept stealing glances upward. He bit his lower lip and ducked his head, flinching as John swung his arm to punctuate some point. Terrence hunched his head, his mouth twitching, and worry lines rippled across his forehead. Lana realized he felt guilty for what he'd done.

---

(0)