The business started last 2004 as sole proprietorship but the business stopped somewhere in 2008 then operated again this 2011. But we are planning change it to corporation, since I met with some investors. How am I going to account for the assets and the liabilities of sole proprietorship if it will be change to corporation?

In visualizing the accounting treatment, it might help to think through the chain of events. An incorporation of a business formerly operating as a sole proprietorship isn't a transformation of one entity into another; in other words, the sole prop doesn't simply become a corporation.

Instead there is a specific sequence of steps. Even if it appears on the surface to be the magic transformation alluded to before, remember that beneath the surface these steps are indeed taking place, even if only on paper.

First the sole prop distributes all of its assets to you, and you assume all of its liabilities. Treat this on the sole prop's books as a draw or owner distribution. (Yes, I know that as a sole prop, the assets and debts are all already IN your name personally. Hence this step--of recording this en masse draw on the sole prop's books--is only necessary if you want to formally zero out the sole prop's balance sheet.)

You will then contribute these assets to the new corporation in exchange for its stock. The corporation will also assume the debts. (Totality isn't required--you might choose to transfer only certain assets into the corp, and/or have the corp only assume some, but not all, of the debts.) Corporation will record specific debits for the assets you transfer in, specific credits for the assumed debts, and the net amount (debit, hopefully, where assets > debts) will be a credit to Common Stock.

Now some of the fine print. (With emphasis on the word "some"---you'll definitely want to rent some of your tax advisor's or accountant's time to get square on all the important details. This is particularly true in a scenario involving outside investors, as you've mentioned. An attorney familiar with incorporations would be advisable as well. Money well spent.)

You'll need to determine which debts are in fact assumable by the corporation. This is largely a function of the nature of the debt, who the creditor / lender is, and what if any property collateralizes the liability. In many cases you'll need their consent.

Kind of similarly, for certain assets (those involving titles or recorded deeds) you'll need to generate the necessary paperwork to make the change of ownership (from you to corp) official.

From a tax perspective, there exists an opportunity for you to make this incorporation a tax-free event (as opposed to having to recognize gains and losses on the differences between the fair values of the assets and their tax bases. A comparison of the total amount of debt transferred to the corporation, with the total tax basis of transferred assets, will play a role here. Your tax advisor / accountant will need to explore the so-called "Section 351 tax-deferred incorporations" to guide you through the details, if available.

Best of luck with the business!