I just created 100 pennies and I loaned them out to you + interest
How is it possible for you to pay me the 101 pennies you now legally owe me if only 100 pennies are in circulation?
Because that's not how it works. There are far more "pennies" in circulation. It's true that debts exceed the money supply but that's not neccissarily a problem since each "penny" can be spent more than once. In fact, if I remember correctly, the velocity of money in the US (how often each unit of currency is spent in a year) is around 4.
Indeed, that's the whole point that kills that recurring story about "asking interest implies the need for printing continuously money".