Preheat the oven to 350 degrees.

Grease and flour two 8 inch cake pans. Set aside.

In a large bowl cream the butter and sugar. 

Add in the eggs one at a time, beating well after each addition.  Stir in the vanilla.

In a medium bowl combine the flour, baking powder, and salt.

Add half of the flour mixture to the butter mixture and mix well.  Add in the milk and stir until combined.  Pour in the remaining flour mixture and mix well.

Divide the batter between the two pans.  Bake for 25-30 minutes. 

Remove from oven and cool for 5 minutes.  Run a butter knife around the edges of the pan and invert the cakes onto a wire rack.  Cool completely.

In a bowl mix the butter, milk, and vanilla with a hand mixer.  Beat for 2 minutes or until smooth. 

Add in the powdered sugar a cup at a time and mix until the frosting is desired consistency.

Place one cake layer on a cake round.  Spread the top with 1 cup of frosting.  Sprinkle with the coconut and top with the second cake layer.  Frost the cake with the remaining frosting.

Cover the sides with the toasted coconut.

Slice and enjoy.