Final answer:
For a company with 20-50% ownership in equity securities, the Equity Method is used for accounting and reporting. Bonds and bank loans are similar as forms of debt but differ in tradability and negotiation terms. Equity in a house is calculated by subtracting the owed mortgage amount from the home's market value.
Step-by-step explanation:
When a company has 20 - 50% ownership in equity securities, the accounting and reporting method used is typically the Equity Method. Under this method, the investor records their share of the investee's profits or losses, which is proportional to their ownership stake. This approach differs from the other listed methods. The Amortized Cost method applies to debt securities that a company intends to hold to maturity, the Fair Value method is used for securities that are bought and sold for short-term profit, and Consolidation is used when an investor has significant influence over the investee, typically over 50% ownership.
To further elucidate, bonds and loans are similar from a firm's perspective in that they are both forms of debt financing. However, bonds are typically sold to investors and can be traded, while a bank loan is a more direct agreement between a bank and a borrower. Lastly, to calculate equity in a house, subtract the amount owed on a mortgage from the house's market value. For example, if Eva bought a house for $200,000 and put down a 10% down payment, her equity would be the down payment amount of $20,000 since she borrowed the remaining $180,000.