I do not know how the custom of making cake for the engagement known in the rest of Serbia, but in the Raska (southwestern part of Serbia) is well known.
The first time I met with these customs when it was my engagement.
This is the cake :)
The mother of my fiance made this cake.
Upon arrival at the house of my parents, they put cake on a table and after drinking the coffee and brandy our dads stood up (The father of my fiance asked my dad if he wants to give me.. :) ) and then break the cake. The whole cake they broken out and share it too all attendees.
This same habit will be for my wedding, except that now cake will make my mom and full custom will be conducted at a wedding.