If the twins were amused, then someone or something was amusing them. Given their actions, it makes more sense to use the active voice and the present participle ("were amusing") as they were amusing the others. Similarly, use the simple past "ended" in the active voice instead of the passive "was ended".
2. Word form:
"Unusual" is an adjective, but here it is a verb that is being modified, so we need to use an adverb ("unusually").
3. Possessive or plural:
"Twins" and "friends" are plural not possessive, so they should not have an apostrophe. Similarly, the word "school's" modifies "friends", so it is an adjective and therefore cannot be possessive or plural. We need to use the word "school".
4. Verb tense:
This story is set in the past, so we need to use either the past progressive or simple past. Instead of "entertain", we should use "entertained". To be consistent, we need to use the simple past tense ("chased" and "imitated") rather than the past perfect ("had chased" and "had imitated").
5. Word confusion:
The possessive pronoun is "their"; "there" is an adverb of place.
6. Word confusion:
The word "than" is used to compare two things; to indicate what happened next, we need to use the word "then".
7. Word confusion:
The word "neighbouring" refers to a place. Here, we need to use either the possessive ("neighbour's" or "neighbourhood").
The first two clauses are independent, so we need to separate them with either a full stop (period) or a semicolon.
As we are constructing a list of actions, we should try to maintain a parallel structure among each of the clauses: "they entertained...", "they chased..." and "they imitated...". The last clause should therefore be rephrased: "...and finally they imitated..."
The twins were unusually amusing; first they entertained their school friends by telling jokes, then they chased after the neighbour’s dog, and finally they imitated their friends.