01 - Preheat oven to 350°F. Grease and flour two 9-inch round cake pans and line the bottoms with parchment paper.
02 - In a medium bowl, whisk together flour, baking powder, and salt until well blended.
03 - In a large bowl, beat butter and sugar with an electric mixer on medium-high speed until light and fluffy, approximately 3 minutes.
04 - Add eggs one at a time, beating thoroughly after each addition. Mix in vanilla extract until incorporated.
05 - Alternately add flour mixture and milk to the butter mixture, beginning and ending with flour. Mix until just combined, taking care not to overmix.
06 - Gently fold in the rainbow sprinkles using a spatula until evenly distributed throughout the batter.
07 - Divide batter evenly between prepared pans. Smooth the tops and bake for 25-30 minutes, or until a toothpick inserted in the center comes out clean.
08 - Let cake layers cool in pans for 10 minutes, then carefully turn out onto wire racks to cool completely before frosting.
09 - Beat softened butter until creamy. Gradually add powdered sugar, milk, vanilla extract, and salt. Continue beating until light, fluffy, and spreadable consistency is achieved.
10 - Once cake layers are completely cool, spread frosting over the top of one layer, stack the second layer on top, then cover the entire cake with remaining frosting. Press extra sprinkles onto the sides and top for decoration.