Prepare the Cake Pans:
Preheat your oven to 350°F (175°C). Grease and flour your cake pans, or line them with parchment paper.
Mix the Dry Ingredients:
In a bowl, whisk together the flour, baking powder, and salt. Set aside.
Cream the Butter and Sugar:
In a large mixing bowl, beat the butter and sugar with an electric mixer until light and fluffy, about 3-4 minutes.
Add Eggs and Extracts:
Beat in the eggs, one at a time, ensuring each is fully incorporated before adding the next. Mix in the vanilla and coconut extracts.
Incorporate Dry Ingredients and Coconut Milk:
Gradually add the dry ingredients to the wet mixture in three additions, alternating with the coconut milk. Begin and end with the dry ingredients. Fold in the shredded coconut.
Bake the Cake:
Divide the batter evenly among the prepared pans. Bake for 25-30 minutes or until a toothpick inserted into the center comes out clean. Let the cakes cool in the pans for 10 minutes, then transfer them to a cooling rack.
Make the Frosting:
In a large bowl, beat the butter until creamy. Gradually add the powdered sugar, beating until smooth. Mix in the coconut milk and coconut extract until the frosting is light and fluffy.
Assemble the Cake:
Place one cake layer on a serving plate. Spread a layer of frosting on top. Repeat with the remaining layers. Frost the sides and top of the cake.
Decorate:
Press shredded coconut gently onto the sides and top of the cake for a beautiful finish.
Serve:
Slice and serve at room temperature. Enjoy!