First, you're probably not going to get 5:1 leverage in the stock market. In the US, if you're holding the position overnight, you're limited to 2:1 leverage by Reg T. If you are a pattern day trader, you can get intraday leverage of 4:1 but that assumes that you're closing your position at the end of every day. Other countries may will have different rules, of course, so it is possible that you're in a country that would allow you to have 5:1 leverage, but most countries for most investors are going to set the ceiling lower.
If you could get 5:1 leverage then, yes, you could buy $3,000 worth of stock by putting up just $600. If the stock declined by 10%, your position would decline by 50%. The $3,000 in stock would be worth $2,700, you'd still owe the broker the $2,400 you borrowed, leaving you with $300. If the stock declined by 20%, you'd lose your entire $600.
Of course, assuming that the decline happens vaguely orderly (i.e. we're not dealing with a flash crash where the stock price drops 20% over the course of a few milliseconds), you'd get a margin call when your margin exceeded your broker's maintenance requirement. In the case that the stock price dropped by 10%, for example, you'd have 9:1 margin which your broker almost certainly isn't going to allow. At that point, you'd be required to deposit more money or to sell some of your stock (and if you didn't act quickly enough, the broker would sell some of your stock at whatever the current market price is).
In your actual example, though, you'd use the $10k in your account to buy the $3k in stock. You wouldn't get leverage until you purchased more than $10k in assets. The broker is going to consider all the cash in the account when determining how much you're allowed to borrow, whether you are meeting your ongoing margin requirements, etc.
