Step 1: Preheat the Oven: Begin by preheating your oven to 350°F (175°C). Grease and flour two 9-inch round cake pans to ensure easy removal after baking.
Step 2: Prepare the Cake Batter: In a large mixing bowl, whisk together the room temperature eggs and 1 cup of granulated sugar until the mixture is light and fluffy. Gradually add the flour and baking powder, mixing until just combined. Pour in the 1/4 cup of freshly squeezed lime juice and stir until incorporated.
Step 3: Bake the Cake Layers: Divide the batter evenly between the two prepared cake pans. Bake in the preheated oven for 25-30 minutes or until a toothpick inserted into the center comes out clean. Once baked, remove the cakes from the oven and allow them to cool in the pans for 10 minutes before transferring them to a cooling rack.
Step 4: Make the Lime Syrup: While the cakes are cooling, prepare the lime syrup. In a small saucepan, combine 3 tbsp of granulated sugar with 3/4 cup of warm water and the remaining lime juice. Stir until the sugar dissolves, then set aside to cool.
Step 5: Prepare the Frosting: In a mixing bowl, beat the softened cream cheese and 1 cup of granulated sugar until smooth and creamy. Gradually add the cold sour cream, lime juice, and lime zest, mixing until well combined and fluffy.
Step 6: Assemble the Cake: Once the cake layers have completely cooled, place one layer on a serving plate. Drizzle half of the lime syrup over the top, allowing it to soak into the cake. Spread a generous layer of frosting over the first cake layer.
Step 7: Add the Second Layer: Place the second cake layer on top of the frosted first layer. Drizzle the remaining lime syrup over the top and spread the frosting over the entire cake, smoothing it out with a spatula.
Step 8: Garnish and Serve: Finally, generously sprinkle the sweetened shredded coconut over the top of the frosted cake. Slice and serve to your eager guests, or enjoy a slice yourself!