A mother accused of killing her two children and briefly taking a university counselor hostage at gunpoint pleaded not guilty on Friday.

Gail Lynn Coontz, 37, was charged with two counts of murder and terroristic threatening. Bond was set at $500,000.

Dressed in a canary yellow jail uniform, the single mom and college student rocked in her chair and wiped her face while waiting to be arraigned.

The children, 14-year-old Greg Coontz and 10-year-old Nikki Coontz, died of multiple gunshot wounds, said Louisville police spokesman Officer Phil Russell.

"It appears they were shot in their sleep," said Jo-Ann Farmer, the chief deputy coroner for Jefferson County.

Police found them in their south Louisville home after the campus hostage situation.

"It just all seems like it's going to be a bad dream and I'm going to wake up from it," said Patty Schneider, who lives directly across the street from the Coontz home about 10 miles south of the university campus.

No one was harmed on the campus.

Neighbors described Gail Coontz as a busy single mom. Russell said she was a widow whose husband died several years earlier.